The International Air Transport Association (IATA) has said that more jobs could be generated and additional economic growth could be achieved in Namibia if intra-African markets are opened up to allow for greater airline transport connectivity.
The ‘Value of Aviation for Africa’ economic report which was commissioned by IATA examined the impact of liberalised air transport for Namibia and 11 other major African economies, and found that Namibia alone could benefit from an additional 10,600 jobs and US$94.2 million additional GDP per year if the countries in the study adopted the Yamoussoukro Decision of 1999 (open skies).
The report, undertaken for IATA by economic consultant, InterVISTAS studied 12 nations including Algeria, Angola, Egypt, Ghana, Kenya, Namibia, Nigeria, Senegal, South Africa, Tunisia and Uganda.
The Yamoussoukro Decision of 1999 committed 44 signatory countries to deregulating air services and to opening regional air markets to transnational competition.
"This report demonstrates beyond doubt the tremendous potential for Namibia if the shackles on aviation are taken off. But for the full benefits to be realized, Namibia should work to encourage all African states to embrace the Yamoussoukro agenda,” said Raphael Kuuchi, IATA’s Vice President for Africa.
A potential five million passengers per year are being denied the opportunity to travel within Africa because of restrictions, and according to IATA, employment and economic growth is just the tip of the iceberg in terms of potential benefits of African open-skies.
“Aviation plays a major role in helping to fulfil the African Union’s mission of an integrated, prosperous and peaceful Africa," added Raphael Kuuchi.
Africa is well placed to enjoy sustained economic growth thanks to a young and expanding population; however because intra-African aviation connectivity and economic health of its airlines are weaker than they could be, opportunities for job creation, business growth and innovation are being lost.
"African airlines are expected to return a profit of just $100 million in 2015, on a net profit margin of 0.8%, the thinnest of all aviation regions. While other regions are experiencing robust growth this year, demand for air travel within the regulatory-constrained intra-African market is only expected to grow by 3.2% this year,” Mr Kuuchi added.
Smarter regulation would stimulate competition, along with demand for travel as businesses and traders would be able to expand into wider markets. All in all, intra-African open skies would benefit not only the airlines and the overall African aviation landscape, but the economies of the countries involved.
This issue was something discussed at the Strategy Summit at this year’s Routes Middle East and Africa forum in Bahrain.
Air Arabia Group chief, Adel Ali highlighted the way the Middle East and Africa look very differently at the economic impact of a liberalised air service market. He cited Kuwait and Jordan as examples of good destination markets that have seen tremendous success from more relaxed regulation.
“In the past nobody flew to the countries, remove the restrictions and now everybody is flying there, carrying many passengers and stimulating demand,” he said.
According to flynas boss, Paul Byrne, "there's an awful lot of work that needs to be done in terms of getting infrastructure right in Africa" and alongside this he said there was "a lot of waste" within the many state airlines currently dominating African skies, highlighting the inefficiencies of their operations.
The report commissioned by IATA found that liberalisation would cause airfares to fall between 25 percent and 37 percent in the 12 countries under review, making air travel more affordable to more people, therefore stimulating an 81 percent increase in traffic flows between the 12 countries within three years.
The bulk of this growth would reportedly be on air services linking Namibia with Angola and South Africa.
You can read the full breakdown of the Routes Middle East and Africa Strategy Summit, with full discussions about African open skies here.
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