Travellers across East Africa are set to enjoy a drop in airfares by a quarter after 23 countries adopted an open skies treaty this week.
Kenya, Rwanda and Ethiopia are among the countries signing the Single African Air Transport Market treaty but Tanzania and Uganda have not assented to it. The treaty guarantees a 25 per cent drop in air fares for 2.4 million travellers who fly within the region.
The open skies treaty will also give the continent’s big four carriers — Ethiopian Airlines, Kenya Airways, RwandAir and South African Airlines — unfettered access and multiple destinations to any city in the countries under the arrangement, as part of African Union’s move to improve connectivity and integrate countries.
The initiative is expected to liberalise air transport markets in Africa by offering lower fares, better connectivity and increasing demand.
“We have seen 23 member states have pledged their solemn commitment to the Single Air Market, the implementation of which will increase the number of routes, reduce the cost of air travel and contribute to the expansion of intra-African trade and tourism,” AU chairperson Moussa Faki Mahamat said.
The EastAfrican understands that already Kenya, Ethiopia, and Rwanda have written notification letters to the 20 countries and stakeholders to align with the new programme.
“The three countries led by Rwanda wrote their letter early this week to the stakeholders and respective countries’ foreign affairs ministries,” a source with knowledge of the matter said.
Tanzania, Uganda and Burundi are yet to sign the treaty, due to concerns over competition within their markets and how this would curtail their dreams of a national airline.
“These countries have in recent times either been propping up their national airlines or changing policies to allow for the entry of bigger players to support their national airlines. They are still discussing these issues, which is why they haven’t signed up for this initiative,” the source said.
Unified air transport market
Rwanda’s President Paul Kagame, who is the current chairman of the African Union is set to preside over the launch of the treaty, and is said to be its biggest cheerleader as he champions for the continent to have a unified air transport market.
The regional countries have over the past 18 years been trying to create a seamless common airspace with no success due to restrictive bilateral air agreements and protectionism by member states.
In the proposal for one aviation bloc, the East African Community was to negotiate air service agreements with foreign countries as one bloc, which would have seen the classification of flights between the countries as domestic airlines thus lowering the costs of airfares.
To date, domestic air transport within the region remains un-harmonised since the work on EAC air transport regulations on liberalisation of air transport has not been adopted.
Meanwhile, the single markets African air transport treaty is receiving pockets of resistance with operators in Nigeria, the biggest aviation market in West Africa, voicing their displeasure saying it will drive them out of business.
Nogie Meggison, the chairman of the Airlines Operators of Nigeria said implementation of the treaty would open the country to losses from competition from smaller countries.
“There was no consultation with the carriers; not any word about fair competition from the bigger players on the continent. We are opening up our market further yet domestic carriers are still struggling,” said Mr Meggison.
Mohammed Joji of the Aircraft Operators of Nigeria said that Nigeria should first deal with local issues facing players before going for the open skies policies.
“Our country cannot be talking about sky liberalisation where local policies have not favoured local carriers to face their African counterparts. We still have perennial problems of foreign exchange, VAT, multiple taxation and high cost of aviation fuel, policy flip-flop. These should be addressed first before we open our skies to other players,” said Mr Joji.
The countries that have signed this treaty are Kenya, Rwanda, Ethiopia, Benin, Burkina Faso, Cote D’Ivoire, Egypt, Gabon, Ghana, Nigeria, Botswana, Cape Verde, Republic of Congo and Guinea Conakry.
Others are Liberia, Mali, Mozambique, Niger, Sierra Leone, South Africa, Swaziland, Togo and Zimbabwe.
The International Air Transport Association (IATA) says that the continental move for a single air transport market would unlock other opportunities.
The continent has over the years suffered from protectionist legal barriers, regulatory hurdles, inadequate infrastructure, high taxes, and protectionism which have slowed down the implementation of the Yamoussoukro Decision adopted in 1999. It committed 44 signatory countries in Africa to liberalisation of their air transport.
“This initiative will ease market entry as airlines will be able to fly freely, boost air transport demand and increase traffic and frequencies in the various routes. It offers better opportunities,” IATA said.