Open skies would lead to growth of Africa’s airlines
Up to 397 African airlines have gone under since 1960, and more could shut down if they don’t evolve fast.
Aviation industry captains and regulators have been pushing for open skies and making air transport affordable in Africa, but these have largely remained pipe dreams even as the number of new flyers grows.
For most Africans, it takes about three weeks’ salary on average to travel by air on the continent, whereas it takes only a three-day salary to fly the same distances in other parts of the world like Europe and the US.
Although up to 28 countries have already signed up to the Single African Air Transport Market (SAATM) treaty, only two have implemented it fully.
“It is a form of colonial hangover that many countries still suffer from. It’s just a matter of time and everyone will see the benefits of an open air space and join,” said Ladislaus Matindi, the CEO of Air Tanzania.
“Even when requesting additional frequencies or stops, you are blocked in many African countries. There is no way we are going to advance if we are working in isolation. We need to put the formula right, and fast,” said Rwandair CEO Yvonne Makolo.
Intra-African connectivity has fallen to its lowest in 10 years at just 43 per cent, from 46.6 per cent in 2007. In Europe it is 67 per cent, in southeast Asia (ASEAN) it is 79 per cent, and in North America it is 78 per cent.
One of the fears has always been that when African countries open their skies to their peers, their smaller airlines will be cannibalised by the big players, something Girma Wake, an African airline expert, disputes.
“Open skies serve both the big and smaller airlines better if they work together. The smaller ones should serve their markets to grow their traffic,” said Mr Girma, who is a board member of Ethiopian Airlines.
The only airline that has recorded success is Ethiopian: Its net profit in the 2017/18 financial year rose almost 2 per cent to $233 million.
All other regions are expected to report profits in 2018 and 2019, with carriers in North America continuing to lead on financial performance, accounting for nearly half of the industry’s total profits.
African air traffic is expected to grow by 15 per cent annually for the next 20 years, but the aviation industry may not benefit from that growth if it does not liberalise.
“Aviation is no longer only for the wealthy, it’s now a utility like electricity, water, Internet. We need to synchronise our priorities as a continent. Without this, it will be hard to optimise the gains,” said Silas Udahemuka, director general of the Rwanda Civil Aviation Authority.