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February 2010 Vol 5, Featured Articles, African Airlines

Selfish Political interests slow African airlines’ growth

Fri, Jan 22, 2010

Even as experts see hope in Yamoussoukro accord implementation writes Sade Ayodele

Even as experts see hope in Yamoussoukro accord implementation

That Africa accounts for about 5 percent of global air traffic, as already established by the International Air Transport Association (IATA), is perhaps no longer the big deal in aviation circles. Rather, what is of paramount interest is the fact that its vibrant market is fast whetting the appetite of Western airlines, such that it is luring them en mass to the region. But the growth, development and successes of airlines on the African continent which should have climbed on the ladder of growth and steady development is ironically being retarded by poor policies initiated by governments in the region and selfish politicians who prefer to ally with foreign airlines instead of their local counterparts.

Rather than encourage home grown businesses, those saddled with the responsibility of giving direction see leadership as personal interests and prefer to sometimes, personalize national interests. This recurring situation, of course, jolted experts at the just concluded annual general assembly of African Airlines Association (AFRAA) in Maputo, Mozambique to express disappointment at their governments for politicizing air transport issues. This realisation, expectedly made them insist that politicians were certainly responsible for the woes bedevilling the airline industry in the continent. 

Aside accusing politicians of doing little to help them thrive and compete with foreign carriers during the current global financial crisis, the officers, who spoke at the meeting maintained that politicians enter into pacts with foreign airlines without consulting the country’s civil aviation authority, and yet, seek to enforce the same through airlines.

“Leasing firms work with politicians and not airlines,” said Ghana Airways Chief Executive Officer, Gifty Annan-Myers. Myers insisted that politicians hardly look into the airlines’ business plans when signing such agreements. She urged politicians to consult with local airlines and aviation industry when negotiating on issues that are likely to affect them.

According to Inati Ntshanga, chief operating officer of South African Airways, “Politicians should not blindly pry into the airline business. The day this happens, there will be a great change in the business”. Ntshanga noted that politicians also interfere with their countries’ civil aviations decisions, which negatively affects the airline business. AFRAA is however asking African governments to protect the civil aviation market from an “invasion” by competitors from the west.

“We are asking African governments not to prejudice the interests of African companies by deliberately admitting companies from the west”, Nick Fadugba, general secretary of AFRAA, said at the conference. “All the African companies are small, weak and without money. So, we are asking for support from the governments. Otherwise, there is a risk that one day, they will all collapse. What I am saying is that most licences are currently held by foreign airlines while the African airlines are losing business”.

He claimed that about 70 percent of air traffic in Africa is in the hands of western or Middle Eastern companies. “That’s why we need funding for infrastructure and training of staff, and above all to develop synergies between the companies, we could share benefits through joint ventures. Working together, we can improve quality.” He admitted that financial difficulties had collapsed several once vibrant African companies. The names that no longer exist include: Nigeria Airways, Ghana Airways and Zambia Airways. Air traffic in Africa rose steadily from 2003 to 2007, but in 2008 there was a four per cent drop in the number of passengers. Last year, despite all efforts to reduce operational costs, African airlines made an overall loss of around $300 million. But this is just a small fraction of the global losses to the airline industry of $16.8 billion.

But a fact that was also stressed at the meeting was that the continent had failed to fully implement the Yamoussoukro accord which is meant to open the continent’s skies to African carriers. According to David Savvy of Air Seychelles, “We have failed to unite. Middle East carriers have taken over our air space and that is why Africans should learn to trust one another”.

African leaders had often been scolded for refusing to implement the Yamoussoukro Declaration (YD), which African aviation ministers jointly agreed to in Cote D’Ivoire in 1989. The same politicking and fear of competition had made it impossible for the government to implement it. The non-implementation of the declaration is to the effect that sometimes, one has to go through European carriers to connect African countries, a situation which creates clumsiness of air connectivity, wastage of time and resources.

Charles Wako, African Civil Aviation Commission (AFCAC) president urged African governments to fully implement the declaration to facilitate the integration of the African air transport system. “Our airlines and indeed air transport system may collapse if the declaration is not implemented immediately. “The declaration was intended to facilitate the liberalisation of access to air transport markets in Africa and to promote and protect the African air transport system,” he noted.

Christian Folly-Kossi, immediate past general-secretary of AFRAA, while giving his annual report, advised airlines should form strategic partnerships, joint ventures or enter into cooperation between the more resource-endowed carriers with their smaller counterparts. He said this would ensure enhanced airline safety and security levels.

He noted that the profitable airlines include Mozambique Airlines (LAM), Ethiopian Airlines and South African Express. Others have registered losses but are in basically sound condition, including South African Airways (SAA), Kenya Airways and Air Mauritius.

He insisted that African airlines “must work together, not just to support each other, but to share benefits,” adding, “we can only advance together”. Folly-Kossi also said blacklisting of some African airlines by some European countries has adversely affected the image of the continent.

“African airlines have presented a united voice to the European Union highlighting the unfairness of the procedures used against certain African carriers,” he noted. The blacklisting of some airlines, especially those from Africa, was greeted with protest from various groups but the EU noted that those airlines were subjected to scrutiny based on international and the commission’s regulations before arriving at the names on the black list.

Many experts had contended that only the International Civil Aviation Organisation (ICAO) had the powers to blacklist airlines, adding that the action of the EU was to further downgrade airlines on the continent where they make most of their profits to finance.

Meanwhile, Folly-Kossi noted that Africa’s aviation industry was also being hit by brain drain with highly trained and experienced professionals taking up jobs out of the continent.

He urged airlines to make use of the world class training facilities on the continent such as Kenya Airways’ Pride Centre, Ethiopia Airlines Training Academy, Egypt Air and Royal Air Maroc Training Centres. He said AFRAA was discussing with airlines on how to exploit opportunities that would be created by the World Cup in South Africa.

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