Look for some progress in Africa and more competition in the Middle East. After years in the doldrums, African aviation looks set for an upturn in fortunes in 1995. Political instability and financial hardship will ensure the negatives still outweigh the positives, but any form of progress will provide the region with invaluable models.

Two major events in African aviation in 1994 offer hope of better things to come this year. Reaffirmation of the Yamoussoukro Declaration produced specific recommendations aimed at ensuring the liberalisation of traffic rights within Africa's five regions over the next two years. And agreement at the end of last year to start operations of the African Joint Air Services carrier, Alliance Airways, in March will boost regional cooperation, a concept that took a major setback with the demise of Air Botswana-inspired Southern Links at the start of 1994.

The secretary general of the African Airlines Association, Mohammed Ahmed, remains cautious about the impact of plans to open up traffic rights. 'We will have to wait and see if states abide by the [Yamoussoukro] recommendations, especially in terms of intra-regional traffic rights.' The main challenge this year will be to try and establish a mechanism to ensure compliance. A committee made up of regional representatives has already been established to look into airline grievances, but has no statutory powers to enforce decisions. In the fickle environment of African aeropolitics, a guarantee of success can only come with enforceable oversight.

The startup of Alliance Airways, a joint venture between South African Airways and the Tanzanian and Ugandan governments, should, at the very least, provide a tonic to the industry. While Ahmed is sceptical that the joint venture will generate extra traffic, he concedes that it 'might set a precedent for others.'

Further good news for the industry this year is an expected reduction in government interference. Normally, turnover of African airline managers runs at some 30 per cent a year, but last year this figure dropped to around 20 per cent and it could fall as low as 15 per cent this year.

Even the liquidation of Zambia Airways has its positive side. Alliance Airways could yet fill the gap left in the country's international links, while there are at least two contenders to take over the former flag carrier's domestic operation, including SA Express. Indeed, the link between the emergence of South Africa from decades of isolation and the first consistent signs of an upturn in the region cannot be ignored.

The process of airline privatisation in Africa is continuing at its usual unpredictable pace. Kenya Airways is the most likely candidate but the sell off, planned for early 1995, is now likely to be delayed until the end of the year. Other carriers still labelled for privatisation are Ghana Airways, Nigeria Airways and Air Zimbabwe, but don't hold your breath.

The political mistrust and uncertainty in the Middle East means little progress will be made in regional cooperation, while increasing competition and low oil prices will continue to unsettle the status quo, especially in the Gulf region.

Wider political and economic considerations mean the impetus for a regional policy has all but evaporated. The Arab Civil Aviation Administration, established in 1993, exists in little more than name.

The fragile nature of the Israeli-Palestinian peace process bodes ill for the stability of the region. Elsewhere, there are initial signs that Iraq - one of the major markets in the region - could be returning to the international fold. At the beginning of the year, France indicated its intention to re-establish diplomatic relations with Saddam Hussein's regime. The French join Russia and China in re-establishing direct links with Iraq, leaving only two of the five permanent members of the UN security council without diplomatic ties.

While Lebanon remains relatively stable, traffic to Beirut should grow rapidly this year, although financially-weak MEA is unlikely to be in a position to benefit fully. A further boost could come if relations are restored with the US.

Expect competition in the Gulf to intensify, with Qatar Airways and Oman Air putting more pressure on the established carriers.

Partial privatisation is scheduled at Gulf Air, Saudia and El Al, but there is still a considerable amount of restructuring needed at all three carriers before the markets are likely to become interested. Political stability, particularly for El Al, is also a prerequisite. Royal Jordanian has been slated for sale for the past two years, but again progress there will depend as much on the success of the Middle East peace process as on any internal restructuring.

Source: Airline Business