Jennifer Bamuturaki (R), the Chief Executive Officer at Uganda Airline and the AFRAA Secretary General, Abderahmane Berthé, addressing the press after the AFRAA 55th AGA
Experts in the aviation industry have asked African countries to drop protectionism tendencies if African airlines are to grow and significantly contribute to the economic growth of the continent.
This comes as African countries struggle to embrace the Single African Air Transport Market (SAATM), a project of the African Union to create a single market for air transport in Africa.
Once completely in force, the single market is supposed to allow significant freedom of air transport in Africa, advancing the AU’s Agenda 2063.
The African Airlines Association (AFRAA) Secretary General, Abderahmane Berthé, says although SAATM was created in 2018, only 37 States have signed up to this initiative out of the possible 54.
Berthé made the remarks on November 21, 2023 while addressing the press after the conclusion of the AFRAA 55th Annual General Assembly hosted by Uganda Airlines from 19 – 21 November 2023 at Speke Resort Munyonyo, Kampala.
Berth says even the 37 States that have signed up to SAATM aren’t fully complying.
He says SAATM will address some of the unique challenges African airlines are facing including the high cost of operation and high taxes that result into high ticket fares.
“African States are not trading enough between themselves. Intra – continental trade in Europe and Asia is over 50%. The level of intra-African trade is about 19%. This can only increase if countries embrace SAATM and the African Continental Free Trade Area (AfCFTA),” Berthé says.
Asked on what is making African countries hesitant to embrace SAATM, Berthé said: “It is a matter of protectionism by countries with national carriers, many of whom are not strong enough. Some of them will die if they don’t cooperate. Airlines should cooperate and realign their routes and schedule. If country A wants traffic rights from country B, the airline from country A is not talking to the airline from country B. The best approach is to cooperate and talk to each other, but this is not happening,” Berthé says.
He notes that currently, 85% of the intra-Africa flights are direct versus 15% connecting.
“Only 21% of the direct flights are operated under 5th freedom traffic rights,” he said, adding that despite the AU’s Single African Air Transport Market flagship project, access to markets and connectivity remains a challenge.
He says the African Civil Aviation Commission is pursing countries to ensure that they embrace SAATM and comply with it.
“They (African Civil Aviation Commission) have an implementation program where they are explaining to countries what SAATM is all about. They want to understand the issues countries have with it and find the possible solutions. Our role as AFRAA is to sensitize our member airlines that SAATM is good for countries and airlines. Morocco opened up their skies and global traffic in the country has gone up, the traffic of the national carrier has also gone up,” Berthé says, adding that AFRAA’s focus is to reduce the cost of operation for African airlines and increase their revenues.
Giving a keynote speech on behalf of AfCFTA Secretariat Secretary General, Wamkele Mene at the AFRAA 55th AGA on November 20, 2023 in Kampala, Emily Mburu-Ndoria, the Director Trade in Services, Investments, Intellectual Property Rights and Digital Trade at AfCFTA Secretariat, said given the vast distances between African countries and cities, coupled with limited road and rail networks, air transport emerges as the practical choice for freight and business.
“Africa’s burgeoning population, currently standing at 1.4 billion, presents a significant opportunity for expanding air travel,” Mburu-Ndoria said, adding that air transport stands as a dynamic force propelling progress by seamlessly connecting people, cultures, and economies worldwide.
“The growth of this sector contributes directly to economic expansion, generating both direct and indirect jobs opportunities within the sector and its associated sectors, including tourism and services. And in many continents, the success of budget airlines has demonstrated their ability to enhance connectivity, reduce costs, and stimulate tourism and job creation,” Mburu-Ndoria said.
Despite the potential contribution of air transport to Africa’s development, the continent accounts for only around 2% of global air traffic, encompassing both passengers and cargo.
“This is largely a reflection of the challenges in the current state of air travel within Africa, exemplified by instances where it is often more economical to fly to another continent than to a neighboring African country. For instance, estimates from a BBC news survey reveal that flying from Berlin to Istanbul may cost around US$150 for a direct flight of less than three hours, while a similar distance, such as between Kinshasa and Lagos, could cost between US$500 and US$850,” Mburu-Ndoria.
She said this cost disparity not only poses challenges for conducting business within Africa but also underscores the necessity for sustainable solutions, particularly in the new era of the AfCFTA.
She says realizing the gains promised by the AfCFTA necessitates the establishment of an efficient and cost-effective transport and logistics service sector.
“This objective can be achieved through the liberalization of air transport services, a task spearheaded by the Single African Aviation Transport Market (SAATM). Serving as a trade-facilitating tool, the SAATM unlocks unparalleled opportunities for the growth and maturation of the African aviation industry,” she said.
She says SAATM is instrumental in mitigating risks and reducing costs associated with intra-regional trade.
By unlocking new trade routes and business prospects across the continent, she said, SAATM becomes a catalyst for economic growth.
“A wealth of evidence supports the notion that liberalizing the air transport market will yield substantial benefits not only for the aviation sector but also for the broader economy. These advantages extend beyond mere economic metrics, positively influencing tourism, employment rates, and deeper involvement in regional and global production value chains,” she said.
Uganda Airlines Ready to Embrace SAATM
Jennifer Bamuturaki, the Chief Executive Officer at Uganda Airlines, the host airline for the AFRAA 55th AGA, said new sustainability requirements pose specific challenges for African airlines.
“This complicates an already difficult operating environment, driving up the cost of fuel and imposing costly closures of airspace.
Blocked funds remain a concern in some markets on the continent, taxation on industry that makes intra-African travel expensive,” she said, adding: “I am pleased to report that these challenges have united us even more and deepened the conversations on how we can work jointly to mitigate them.”
Despite the challenges,she said, the industry in Africa has shown remarkable resilience and continued with its recovery from Covid-19 disruptions.
In its latest numbers, IATA reports that traffic in September 2023, was 28.1 percent above the same period in 2022.
“This is true and we see these numbers in our operations,” she said, adding that Africa’s share of the global passenger market which has stagnated at 2.1 percent is a result of many factors including the status of African economy, visa restrictions and closed markets within the continent.
“It can be argued that the fastest way to improve this metric is to speed up market liberalisation to increase intra-African travel and justify the investment that operators need to make in additional capacity, infrastructure upgrades and regulatory revisions,” Bamuturaki said, adding: “On a positive note, initiatives to open up the continent’s aviation and improve connectivity are gaining traction. At least two-thirds of African states have signed up to SAATM and are at different stages of implementation. Here in Uganda, internal conversations about joining SAATM have started.”
Gen. Edward Katumba Wamala, Uganda’s Minister of Works and Transport, says Uganda welcomes SAATM and reaffirms its commitment to join the initiative.
“… in principle, we have always supported the idea of a liberal African air transport market,” Katumba says, adding: “We, however, wish to note that SAATM is not an event but a process. To this end, we have commenced the process to align our legal regime with SAATM principles. In due course, we shall be announcing our commencement date.”
He notes that SAATM is not a magic wand and needs supportive action in other areas before its full benefits can be realised.
“For instance, we cannot hope to make headway without opening our borders so that citizens can travel unimpeded.Without opening borders, we are putting the proverbial cart before the horse, and the benefits will indeed be limited. I, therefore, congratulate those countries that have fully opened their borders to Africans.”
Out of all African countries, only five can boast of complete visa-free entry for visiting African. These are Kenya, Rwanda, Seychelles, Gambia and Benin.
