By Muyiwa Lucas
It was the gathering of African leaders
in Addis Ababa, Ethiopia for the 30th Ordinary Session of the Assembly
of Heads of State and Government of the African Union (AU). Among the
burning issues determined at the meeting, which
held early last January, was the inauguration of the Single African Air
Transport Market (SAATM).
in Addis Ababa, Ethiopia for the 30th Ordinary Session of the Assembly
of Heads of State and Government of the African Union (AU). Among the
burning issues determined at the meeting, which
held early last January, was the inauguration of the Single African Air
Transport Market (SAATM).
With one voice, the gathering launched
the liberalisation of the continent’s airspace for airlines registered
in Africa, thereby liberalising aviation rules and regulations among the
member countries. The policy, which literarily
translates to open skies operation for African airlines within the
continent, was aimed at creating a free market environment for airlines
registered in the continent.
the liberalisation of the continent’s airspace for airlines registered
in Africa, thereby liberalising aviation rules and regulations among the
member countries. The policy, which literarily
translates to open skies operation for African airlines within the
continent, was aimed at creating a free market environment for airlines
registered in the continent.
Under the AU Agenda 2063, SAATM is a
flagship project targeted at establishing a single unified and
liberalised air transport market on the continent. It was adopted by the
AU Assembly in 2015 as a way of implementing the Yamoussoukro
Decision of 1999 that provides for full liberalisation in terms of
market access between African states, the free exercise of traffic
rights, the elimination of restrictions on ownership and the full
liberalisation of frequencies, fares and capacities.
flagship project targeted at establishing a single unified and
liberalised air transport market on the continent. It was adopted by the
AU Assembly in 2015 as a way of implementing the Yamoussoukro
Decision of 1999 that provides for full liberalisation in terms of
market access between African states, the free exercise of traffic
rights, the elimination of restrictions on ownership and the full
liberalisation of frequencies, fares and capacities.
According to the AU, the commencement of
SAATM will create opportunities among countries on the continent to
promote trade and cross-border investments both in the production and
service industries, tourism inclusive. By extension,
it would lead to the creation of more 300,000 direct and two million
indirect jobs.
SAATM will create opportunities among countries on the continent to
promote trade and cross-border investments both in the production and
service industries, tourism inclusive. By extension,
it would lead to the creation of more 300,000 direct and two million
indirect jobs.
Eleven AU member-states, including
Nigeria, championed the Declaration by signing the Solemn Commitment to
actualise the Yamoussoukro Decision creating the single market.
Signatories to the agreement have increased to 23 countries.
Nigeria, championed the Declaration by signing the Solemn Commitment to
actualise the Yamoussoukro Decision creating the single market.
Signatories to the agreement have increased to 23 countries.
In May 2016, the AU also sought a further
commitment of signatories and wrote to states that had signed the
commitment to highlight a number of measures they should take as soon as
possible to initiate operationalisation of the
single air transport market on the continent. Among the measures was
that each country should officially publish in accordance with its
national regulations or gazette that they are committed to the immediate
implementation of the Yamoussoukro Decision under
the terms of the Declaration of Solemn Commitment in line with the AU
Agenda 2063. Nigeria was a signatory to this.
commitment of signatories and wrote to states that had signed the
commitment to highlight a number of measures they should take as soon as
possible to initiate operationalisation of the
single air transport market on the continent. Among the measures was
that each country should officially publish in accordance with its
national regulations or gazette that they are committed to the immediate
implementation of the Yamoussoukro Decision under
the terms of the Declaration of Solemn Commitment in line with the AU
Agenda 2063. Nigeria was a signatory to this.
As at the last count, 22 other
member-nations have penned the document. They include Benin, Burkina
Faso, Botswana, Cape Verde, Republic of Congo, Cote d’Ivoire, Egypt,
Ethiopia, and Gabon. Others are Ghana, Guinea, Kenya, Liberia,
Mali, Mozambique, Niger, Rwanda, Sierra Leone, South Africa, Swaziland,
Togo, and Zimbabwe.
member-nations have penned the document. They include Benin, Burkina
Faso, Botswana, Cape Verde, Republic of Congo, Cote d’Ivoire, Egypt,
Ethiopia, and Gabon. Others are Ghana, Guinea, Kenya, Liberia,
Mali, Mozambique, Niger, Rwanda, Sierra Leone, South Africa, Swaziland,
Togo, and Zimbabwe.
A simple analysis of the signed up
countries that have ratified the policy had a combined population of
about 670 million. Besides, as at 2015, this figure amounted to a
combined Gross Domestic Product (GDP) of $15 billion, which
was over 65 per cent of the continent’s average $1888 per capita.
countries that have ratified the policy had a combined population of
about 670 million. Besides, as at 2015, this figure amounted to a
combined Gross Domestic Product (GDP) of $15 billion, which
was over 65 per cent of the continent’s average $1888 per capita.
Euphoria
For the international community and
critical stakeholders in the aviation industry, this presents a new dawn
for air transport business in the continent. According to “Flying
Doctors Nigeria,”a member of the British Safety Council
that specialises in providing medical solutions such as air ambulance
and medical evacuation, among others, Africa is home to 12 per cent of
the world’s population, but it accounts for less than one per cent of
the global air service market.
critical stakeholders in the aviation industry, this presents a new dawn
for air transport business in the continent. According to “Flying
Doctors Nigeria,”a member of the British Safety Council
that specialises in providing medical solutions such as air ambulance
and medical evacuation, among others, Africa is home to 12 per cent of
the world’s population, but it accounts for less than one per cent of
the global air service market.
The body, citing a World Bank study,
argued that part of the reasons for Africa’s under-served status is that
many African countries restrict their air services markets to protect
local, state-owned air carriers. However, many
of these state-owned airlines lack efficiency resulting in inflated
fares, sub-optimal service and poor safety. It noted further that Air
travel choices in Africa remains constrained by sub-optimal travel
conditions such as long layovers, high fares, safety
issues, uncertain flight schedules and poor quality of services,
underscoring the challenges facing air carriers trying to attract
passengers and at the same time make profits.
argued that part of the reasons for Africa’s under-served status is that
many African countries restrict their air services markets to protect
local, state-owned air carriers. However, many
of these state-owned airlines lack efficiency resulting in inflated
fares, sub-optimal service and poor safety. It noted further that Air
travel choices in Africa remains constrained by sub-optimal travel
conditions such as long layovers, high fares, safety
issues, uncertain flight schedules and poor quality of services,
underscoring the challenges facing air carriers trying to attract
passengers and at the same time make profits.
For instance, Flying Doctors noted that
Cape Verde is just four hours away from Lagos and holds massive
potential as a destination for Nigerian holiday makers. However, in
order to get to Sal, Cape Verde, a passenger must first
fly to Morocco which is four to five hours from Lagos. Then, after a
stopover of up to 12 hours in Casablanca, the traveller will proceed on
another three hours flight to Cape Verde. But with SAATM, the
cumbersomeness of trips like this will be eradicated.
Cape Verde is just four hours away from Lagos and holds massive
potential as a destination for Nigerian holiday makers. However, in
order to get to Sal, Cape Verde, a passenger must first
fly to Morocco which is four to five hours from Lagos. Then, after a
stopover of up to 12 hours in Casablanca, the traveller will proceed on
another three hours flight to Cape Verde. But with SAATM, the
cumbersomeness of trips like this will be eradicated.
Such positivity remains the driving force
for other bodies like the International Air Transport Association
(IATA), whose belief in the initiative is buoyed by the multiplier
effect the enhanced connectivity would stimulate. The
global body is convinced that SAATM will enhance travel demand, improve
the competitiveness of the African airline industry, and make air
travel more accessible. In turn, IATA is hopeful that it would enable
higher volumes of trade, expanded tourism and growing
commerce between African nations and with the rest of the world.
for other bodies like the International Air Transport Association
(IATA), whose belief in the initiative is buoyed by the multiplier
effect the enhanced connectivity would stimulate. The
global body is convinced that SAATM will enhance travel demand, improve
the competitiveness of the African airline industry, and make air
travel more accessible. In turn, IATA is hopeful that it would enable
higher volumes of trade, expanded tourism and growing
commerce between African nations and with the rest of the world.
”The SAATM has the potential for
remarkable transformation that will build prosperity while connecting
the African continent. Every open air service arrangement has boosted
traffic, lifted economies and created jobs. And we expect
no less in Africa on the back of the SAATM agreement. An IATA survey
suggests that if just 12 key African countries opened their markets and
increased connectivity, an extra 155,000 jobs and $1.3 billion in yearly
GDP would be created in those countries. It
is an important step forward. But the benefits of a connected continent
will only be realised through effective implementation of
SAATM—firstly, by the countries already committed, and also by the
remaining 32 AUmember-nations still to come on board,”
IATA’s Vice President for Africa, Raphael Kuuchi, said.
remarkable transformation that will build prosperity while connecting
the African continent. Every open air service arrangement has boosted
traffic, lifted economies and created jobs. And we expect
no less in Africa on the back of the SAATM agreement. An IATA survey
suggests that if just 12 key African countries opened their markets and
increased connectivity, an extra 155,000 jobs and $1.3 billion in yearly
GDP would be created in those countries. It
is an important step forward. But the benefits of a connected continent
will only be realised through effective implementation of
SAATM—firstly, by the countries already committed, and also by the
remaining 32 AUmember-nations still to come on board,”
IATA’s Vice President for Africa, Raphael Kuuchi, said.
While Kuuchi sees SAATM as a decisive
step towards greater intra-African connectivity, as greater connectivity
will lead to greater prosperity of both operators and government, there
is palpable fear and discontent in the domestic
industry. Among many industry players, the belief is that SAATM would
make it difficult for member-countries that have adopted the policy to
resist the temptation to protect their own airlines, accept uniform
tariff for aviation charges, and open their airspace
benevolently to other airlines in Africa.
step towards greater intra-African connectivity, as greater connectivity
will lead to greater prosperity of both operators and government, there
is palpable fear and discontent in the domestic
industry. Among many industry players, the belief is that SAATM would
make it difficult for member-countries that have adopted the policy to
resist the temptation to protect their own airlines, accept uniform
tariff for aviation charges, and open their airspace
benevolently to other airlines in Africa.
Short-comings
For airline operators in the country, the
signing up of SAATM may be noble on paper, but there is a need for the
government to thread with caution, especially because of the dangers of
the direct impact of the decision on the
local industry, the airlines and the economy as a whole.
signing up of SAATM may be noble on paper, but there is a need for the
government to thread with caution, especially because of the dangers of
the direct impact of the decision on the
local industry, the airlines and the economy as a whole.
Airline Operators of Nigeria (AON)
Chairman, Captain Nogie Meggison, said the domestic airlines are aversed
to this policy because of the timing, which it says is not right. This
is because there are numerous unresolved issues
and challenges being faced by Nigerian aviation that will, ultimately,
undermine the perceived gains of this treaty.
Chairman, Captain Nogie Meggison, said the domestic airlines are aversed
to this policy because of the timing, which it says is not right. This
is because there are numerous unresolved issues
and challenges being faced by Nigerian aviation that will, ultimately,
undermine the perceived gains of this treaty.
Meggison highlighted some of the problems
that has put the country at a disadvantage of competing favourably in
the open skies treaty to include the requirement of visas to 34 African
countries from Nigerians who are supposed
to be travelling within Africa under the open sky treaty require as a
prerequisite; for now, only travels within West Africa are Nigerians
allowed free movements with visa issued at entry points.
that has put the country at a disadvantage of competing favourably in
the open skies treaty to include the requirement of visas to 34 African
countries from Nigerians who are supposed
to be travelling within Africa under the open sky treaty require as a
prerequisite; for now, only travels within West Africa are Nigerians
allowed free movements with visa issued at entry points.
Besides, he said other African airlines
that would be in competition with Nigerian carriers are largely
government-owned and heavily subsidised. For instance, the AON boss
explained that South African Airways got, on the average,
about $350 million yearly in the past decade; Kenya Airways got about
$600 million in 2016, while RwandAir has never published its financial
results for over a decade.
that would be in competition with Nigerian carriers are largely
government-owned and heavily subsidised. For instance, the AON boss
explained that South African Airways got, on the average,
about $350 million yearly in the past decade; Kenya Airways got about
$600 million in 2016, while RwandAir has never published its financial
results for over a decade.
“Nigerian airlines have a high bank
interest rates of 28 per cent compared to access to cheap funds provided
and guaranteed by the government of most African carriers at a maximum
of two per cent,” Meggison lamented. He added
that while domestic airlines pay VAT to the government, most African
carriers do not pay VAT both in their various countries as well as here
in Nigeria. This, he explained, was already a deficit of five per cent
on a small margin industry from the start for
the airlines.
interest rates of 28 per cent compared to access to cheap funds provided
and guaranteed by the government of most African carriers at a maximum
of two per cent,” Meggison lamented. He added
that while domestic airlines pay VAT to the government, most African
carriers do not pay VAT both in their various countries as well as here
in Nigeria. This, he explained, was already a deficit of five per cent
on a small margin industry from the start for
the airlines.
Other challenges, he noted, to include
that the taxes/charges around Africa are not uniform across board.
“African governments should first ensure all the taxes are uniform among
countries before the implementation of the open
skies treaty. For instance, when airlines fly to some
African countries they charge the operators heavy landing fees in excess
of $5,000 – $6,000, whereas the same African countries subsidise their
local operators who
pay $200 for the same service. But when they fly into Nigeria, they pay
a mere $500, the same as our local carriers,” Meggison noted.
that the taxes/charges around Africa are not uniform across board.
“African governments should first ensure all the taxes are uniform among
countries before the implementation of the open
skies treaty. For instance, when airlines fly to some
African countries they charge the operators heavy landing fees in excess
of $5,000 – $6,000, whereas the same African countries subsidise their
local operators who
pay $200 for the same service. But when they fly into Nigeria, they pay
a mere $500, the same as our local carriers,” Meggison noted.
He warned that a full implementation of
SAATM would lead to massive capital flight, huge loss of jobs for youths
and a mortgaging of their future, as well as a further collapse of the
already failing aviation system.
SAATM would lead to massive capital flight, huge loss of jobs for youths
and a mortgaging of their future, as well as a further collapse of the
already failing aviation system.
“Nigeria is simply not ready to handle
the level of unfair competition the full implementation of SAATM will
bring upon the country,” Meggison submitted.
the level of unfair competition the full implementation of SAATM will
bring upon the country,” Meggison submitted.
A step in the right direction
But while the AON holds this position,
the policy has gained support from other stakeholders. The Managing
Partner, Belujane Konzult, Mr. Chris Aligbe, said rather than the AON
complaining, they should have been proactive and
keyed into the policy. He revealed that the SAATM
was signed in 2014, and only being implemented this year. “Our
domestic operators did not react positively to this policy. They (AON)
had four years to prepare and key into it. You cannot stop a moving
train,” Aligbe said.
the policy has gained support from other stakeholders. The Managing
Partner, Belujane Konzult, Mr. Chris Aligbe, said rather than the AON
complaining, they should have been proactive and
keyed into the policy. He revealed that the SAATM
was signed in 2014, and only being implemented this year. “Our
domestic operators did not react positively to this policy. They (AON)
had four years to prepare and key into it. You cannot stop a moving
train,” Aligbe said.
He advised AON to do the right thing
instead of blaming the government for their misfortune. He is convinced
that if domestic carriers got their acts together, SAATM can be
exploited to Nigeria’s advantage. “AON should be proactive.
They are kicking against everything including the planned Nigeria Air.
They should act fast because it is not Nigeria Air that will fight them
but airlines like Ethiopian Airline, which flies into five destinations
in the country; Ghana Air, among others.
Other domestic carriers should be happy that the policy benefits of
Nigeria Air will rub off on them,” he said.
instead of blaming the government for their misfortune. He is convinced
that if domestic carriers got their acts together, SAATM can be
exploited to Nigeria’s advantage. “AON should be proactive.
They are kicking against everything including the planned Nigeria Air.
They should act fast because it is not Nigeria Air that will fight them
but airlines like Ethiopian Airline, which flies into five destinations
in the country; Ghana Air, among others.
Other domestic carriers should be happy that the policy benefits of
Nigeria Air will rub off on them,” he said.
Aligbe, a former Public Relations manager
in the defunct Nigeria Airways, explained that SAATM will be extremely
beneficial to the country and her domestic industry if “we wake up and
key into it.” He said the birthing of Nigeria
Air was appropriate because that is the only way Nigeria can benefit
from SAATM. “If Nigeria Air is properly run as being touted, then we
will benefit alot from SAATM,” he said.
in the defunct Nigeria Airways, explained that SAATM will be extremely
beneficial to the country and her domestic industry if “we wake up and
key into it.” He said the birthing of Nigeria
Air was appropriate because that is the only way Nigeria can benefit
from SAATM. “If Nigeria Air is properly run as being touted, then we
will benefit alot from SAATM,” he said.
Aligbe, however, cautioned on the choice
of partner for the Nigeria Air, warning that on no account should it be
made to partner with Ethiopian Airline (ET). His reasons: “Look at what
ET has done. In 2017, ET carried 203, 000
passengers out of Nigeria, well ahead of British Airways that lifted
123, 000 passengers and Emirates’ 103, 000. Besides, ET’s subsidiary,
A-Sky operates six to seven flights into Nigeria weekly; ET has invested
in Rwanda Air and Air Namibia. Very soon, ET
will become an octopus taking over the market. That is why Nigeria Air
must not be made to partner with the East African carrier,” Aligbe
warned.
of partner for the Nigeria Air, warning that on no account should it be
made to partner with Ethiopian Airline (ET). His reasons: “Look at what
ET has done. In 2017, ET carried 203, 000
passengers out of Nigeria, well ahead of British Airways that lifted
123, 000 passengers and Emirates’ 103, 000. Besides, ET’s subsidiary,
A-Sky operates six to seven flights into Nigeria weekly; ET has invested
in Rwanda Air and Air Namibia. Very soon, ET
will become an octopus taking over the market. That is why Nigeria Air
must not be made to partner with the East African carrier,” Aligbe
warned.
Already, Overland Airways, a Nigerian
carrier, is taking advantage of the policy. The airline recently began
flight operations into Lome, Togo. Other airlines, such as Aero
contractors and Medview, are expected to spread their
wings to more African countries in the coming days.
carrier, is taking advantage of the policy. The airline recently began
flight operations into Lome, Togo. Other airlines, such as Aero
contractors and Medview, are expected to spread their
wings to more African countries in the coming days.
African Civil Aviation Commission (AFCAC)
Secretary-General, Mrs. Iyabo Sosina, also admonished Nigerian airlines
to prepare themselves to compete; otherwise, they would be overtaken by
the new policy, which is projected to boost
the economy of the continent. However, she said AFCAC was talking to
those countries to review downwards their charges and open up their
processes to allow the single market policy to work.
Secretary-General, Mrs. Iyabo Sosina, also admonished Nigerian airlines
to prepare themselves to compete; otherwise, they would be overtaken by
the new policy, which is projected to boost
the economy of the continent. However, she said AFCAC was talking to
those countries to review downwards their charges and open up their
processes to allow the single market policy to work.
Nigerian Civil Aviation Authority (NCAA)
Director-General, Captain Muhtar Usman, said SAATM would create more
jobs in the aviation and tourism sectors of the continent, increase
member states’ yearly GDP and revolutionise interconnectivity
within the continent, among others.
Director-General, Captain Muhtar Usman, said SAATM would create more
jobs in the aviation and tourism sectors of the continent, increase
member states’ yearly GDP and revolutionise interconnectivity
within the continent, among others.
The Minister of State for Aviation,
Senator Hadi Sirika, speaking in an earlier interview with reporters,
said Nigeria, with a market of over 173 million people, half of the size
of West Africa, will be the greatest beneficiary
of this treaty. He explained that at the time the country was pushing
for this, Nigeria Airways was in existence, hence the country would have
taken advantage of it.
Senator Hadi Sirika, speaking in an earlier interview with reporters,
said Nigeria, with a market of over 173 million people, half of the size
of West Africa, will be the greatest beneficiary
of this treaty. He explained that at the time the country was pushing
for this, Nigeria Airways was in existence, hence the country would have
taken advantage of it.
“So, I believe that we are on the right
course. I believe that the national carrier, which would be driven by
the private sector, once established, will become a dominant carrier in
Africa. This is because Nigeria is the market.
Nigeria’s centrality to Africa by its location is equidistant from the
farthest point in Africa and with the population of 173 million people,
we have the market in the continent, and this is coupled with the fact
that Nigerians are very mobile. We are great
travellers. We almost travel for nothing. So, Nigeria is in a very
vantage position to benefit hugely from SAATM,” Sirika said.
course. I believe that the national carrier, which would be driven by
the private sector, once established, will become a dominant carrier in
Africa. This is because Nigeria is the market.
Nigeria’s centrality to Africa by its location is equidistant from the
farthest point in Africa and with the population of 173 million people,
we have the market in the continent, and this is coupled with the fact
that Nigerians are very mobile. We are great
travellers. We almost travel for nothing. So, Nigeria is in a very
vantage position to benefit hugely from SAATM,” Sirika said.
The minister revealed that the Nigerian
carriers were at the forefront of the campaign to respect and to
implement the Yamoussoukro Decision at the time they felt the treaty
would be to their advantage.
According to him, “Nigerian airlines have refused to grow and
their challenges are not caused by government. They are responsible for
those challenges. I boldly invite them to come and very soon there will
be stakeholders meeting where the airlines will
be present. We will dialogue about their situations. My advice to them
is to get their acts together to focus, to reorganise, to re-engineer
and take advantage of this opportunity offered by SAATM and be
futuristic rather than to sit here while the train is
moving and begin to whine’’.
carriers were at the forefront of the campaign to respect and to
implement the Yamoussoukro Decision at the time they felt the treaty
would be to their advantage.
According to him, “Nigerian airlines have refused to grow and
their challenges are not caused by government. They are responsible for
those challenges. I boldly invite them to come and very soon there will
be stakeholders meeting where the airlines will
be present. We will dialogue about their situations. My advice to them
is to get their acts together to focus, to reorganise, to re-engineer
and take advantage of this opportunity offered by SAATM and be
futuristic rather than to sit here while the train is
moving and begin to whine’’.
