Obstacles to Aviation Growth in Africa
By Khalifa Hened
Published October 14, 2017
Though African aviation supports 6.8 million jobs and contributes US$72.5 billion in Gross Domestic Product (GDP) while passenger demand is set to expand by an average of 5.7% annually over the next 20 years, the incredible economic opportunities for the continent’s 54 countries are hindered by concerns over safety, blocked funds, connectivity and regulations.
The International Air Transport Association (IATA) forecasts Africa will be a market of 350 million airline passengers by 2035 and identified four priorities which must be addressed if aviation is to deliver maximum economic and social benefits for the countries on the continent.
“Aviation is the lifeblood of Africa. It connects business, enables trade and tourism, reunites families and friends, links cultures and delivers aid to those in need. But despite aviation’s social and economic benefits, airlines are seeing their profits eroded and margins squeezed. Globally, the average profit per passenger in 2017 will be about US$7.69. In contrast, African carriers are forecast to lose US$1.50 per passenger,” said Muhammad Ali Albakri, IATA’s Regional Vice President for the Middle East & Africa, at the IATA Middle East and Africa Aviation Day in Jordan.
IATA urges airlines and Governments in Africa to continue their commitment to the IATA Operational Safety Audit (IOSA). “IOSA registration makes a big difference – the results speak for themselves. The 33 sub-Saharan airlines on the IOSA registry performed nearly twice as well as the non-IOSA airlines in 2016 in terms of all accidents and performed 7.5 times better than non-IOSA operators in the 2012-2016 period. More Governments need to recognize this and help maintain this strong safety momentum in Africa by making IOSA a part of their airline certification process,” Al Bakri says.
IATA calls on African governments to continue raising their levels of adherence to the global standards of the United Nations International Civil Aviation Organization (ICAO) and to accelerate the implementation of ICAO’s safety-related standards and recommended practices (SARPS). By the end of 2016, only 22 African countries had implemented at least 60% of the SARPS.
“The value of Intra-Africa connectivity cannot be stressed enough; it is invaluable in promoting and supporting the continent’s growth. Implementation of Africa’s visionary framework for enhancing connectivity across the continent, as envisaged in the Yamoussoukro Declaration, has been slow. This needs to change,” says Al Bakri.
IATA welcomes the imminent launch of the Single Africa Air Transport Market (SAATM) by the African Union and urges Governments and industry to fully embrace the project to unlock the full benefits of aviation in Africa. “We have seen too many lost opportunities from an unconnected continent. The SAATM framework has the potential to transform Africa’s fortunes but it is up to governments and industry to get off the runway,” says Al Bakri.
- Blocked Funds
Blocked funds in Africa is a growing problem with carriers unable to repatriate their foreign currency earnings from nine African countries. IATA urges Governments where currency is blocked to find practical solutions to release airlines’ funds in line with global standards and bilateral treaty obligations.
“Many of the countries with blocked funds are undergoing significant economic challenges. But blocking airlines’ funds is not the answer. Airlines are powerful economic enablers and if they cannot recover revenues which are essential to covering their costs they will be unable to provide the connectivity that is vital for countries’ economic growth,” explains Al Bakri, “It is in everybody’s interest to ensure that airlines are paid on-time, at fair exchange rates and in full. We have had success in Egypt where the Government has completely cleared the backlog of funds. We appeal to other Governments – Angola and Sudan – to follow suit.”
- Smarter Regulation
IATA urges African governments to adopt its Smarter Regulation framework to avoid unintended consequences when designing or implementing aviation policies.
“The recent proliferation of regulations across Africa such as the tourism tax in Tunisia have placed an undue burden on aviation’s ability to act as a catalyst for economic and social development. IATA’s Smarter Regulation is the solution to achieve growth-supporting policies for aviation and ultimately to boost social and economic development,” says Al Bakri.