Liberalizing African skies Could Add $1.3 Bln To Airline Business

Liberalizing African skies Could Add $1.3 Bln To Airline Business

Liberalizing African skies and opening up to each country to competition could generate an extra $1.3 billion in annual gross domestic product (GDP), with just 12 key markets providing an extra 155 000 jobs, a new report from IATA and InterVistas said.

The ‘Transforming Intra-Africa Air Connectivity’ report examined the potential benefits to 12 African nations if they were to implement the 1999 Yamoussoukro Decision, which had committed 44 signatory countries to deregulating air services and to opening regional air markets to transnational competition.

The nations examined are: Algeria, Angola, Egypt, Ethiopia, Ghana, Kenya, Namibia, Nigeria, Senegal, South Africa, Tunisia and Uganda. South Africa has the most to gain, according to the report, with GDP expected to grow by $283m a year and 14,500 jobs created as a result of the changes.

Currently the aviation sector supports 6.9 million jobs and $80bn in GDP across Africa. Liberalizing the market would result in a 16 percent increase in GDP and a 2 percent rise in jobs, MRO Network reported.

“While many air markets between Africa and countries outside of Africa have been liberalized to a significant extent, most intra-African aviation markets remain largely closed, subject to restrictive bilateral agreements which limit the growth and development of air services. This has limited the potential for aviation to be an engine of growth and development,” the report says.

The study showed that unlocking Africa’s aviation industry would increase air service levels and lower fares, which would lead to economic growth and increased employment through additional traffic volumes and the boost in tourism, trade and investment, besides other sectors of the economy.

The study also indicated that each 10 percent increase in international air services led to a 0.07 percent increase in GDP, which translated into millions of dollars of incremental GDP, Engineering News reported.

“Africa represents a huge potential market for aviation. It is, therefore, unfortunate that African States are opening their aviation markets to [other] countries but not each other,” said IATA CEO and director-general Tony Tyler.