The quest to create a unified African airspace

Africa’s air carriers are now looking at forging mutually beneficial ties to boost intra-Africa air connectivity. Jimmy Wanjala info@airspacenews.co.ke It was always the dream of great Pan-Africanist leaders such as W.E.B. Du Bois, Marcus Garvey, Léopold Senghor, Kwame Nkrumah and Muammar Gaddafi to see a united Africa. A continent united socially, politically and economically. While many obstacles have stood in the way of this dream, Africa has been steadily moving towards unity and integration and this dream is still held on by millions throughout Africa and the world. In the aviation industry, policy and legislation reforms in Africa are gradually opening its airspace to increased commercial transactions from both national and international aviation stakeholders. AMBITIOUS TRADE AGREEMENT The summit of the African Union held in July 2019 was a moment of great impetus for Africa as it saw the successful launching of the operationalisation of the African Continental Free Trade Area (AfCFTA). AfCFTA is a high ambition trade agreement, with a comprehensive scope that aims to make Africa a single market by eliminating barriers to trade and significantly boosting intra-Africa trade. On January 29 2018, African Heads of State and Government formally established and launched the Single African Air Transport Market (SAATM), a flagship project of the African Union’s Agenda 2063, aimed at creating a single unified air transport market in Africa, liberalise civil aviation and drive the continent’s economic integration agenda. AfCFTA and SAATM hold immense opportunities for Africa and the aviation industry as 54 and 34 African states respectively have signed up for the agreements. These two agreements are a step towards harmonising regulations for a more coherent atmosphere that liberalizes air services for aviation businesses and airlines. Taking a leaf from the AfCFTA and SAATM, Africa’s air carriers are now looking at forging mutually beneficial ties to boost intra-Africa air connectivity. For instance, our own ‘Pride of Africa’, KQ and South African Airways (SAA,) signed a Strategic Partnership Framework in 2021 which is expected to improve their financial viability by cutting costs, increasing the size of the available fleet at their disposal through code sharing, and potentially leading to a new pan-African airline group by 2023. So, how are these policies likely to impact the African aviation industry? For starters, it creates immense opportunities for financiers to finance the expected growth which will be extremely capital intensive. African financial institutions should be angling on how to plug into this growth since they have the ability to provide affordable loans or leasing arrangements. FRAGMENTATION OF MARKET Secondly, fragmentation of the market will be eliminated. Currently, Africa has a population of roughly 1.4 billion people. It has airlines in excess of 300 and its market represents around 2 per cent of global air traffic. This is unsustainable since it’s too fragmented, thus driving up the cost of doing business and increasing risks. With integration, it will become necessary for companies to enter into partnerships, mergers and joint ventures effectively killing market fragmentation and consolidating the same. Thirdly, the cost of air carriage, whether passenger or cargo, will eventually drop. As intra-Africa transactions increase and prohibitive policies are rolled back, the market will auto-correct itself and the cost of air transport will go down. Pooling of resources will mean companies will enjoy economies of scale and subsequently pass that benefit to consumers. Finally, employment opportunities will increase significantly as the industry grows. AfCFTA is expected to boost Africa’s income by $450 billion (Sh53 trillion) by 2035 and holds the potential of uplifting over 30 million people out of extreme poverty. Airports, airlines, aviation authorities and all other players in the industry will require human resource. Nevertheless, the realisation the Pan-African air space is not without its fair share of challenges. For instance, it will take some time before all the States ratify both agreements and design national frameworks for the implementation of the same. To realise the fruits of the agreements and Pan-Africanism, African states need to consider various aspects in regards to registration, ownership and control of aircrafts, infrastructural set-up, unified anti-trust/competition rules, consumer rights, taxes and commercial viability. Upon considering all these, they can then come up with national and regional frameworks to address the same and connect to the larger African air space. www.airspacenews.co.ke