Economic benefits of liberal African aviation

Economic benefits of liberal African aviation

2014-08-19 05:00

Johannesburg - While many air markets between Africa and countries outside of Africa have been liberalised to a significant extent, most intra-African aviation markets remain largely closed and 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, according to research done for the International Air Transport Association (Iata) by InterVistas Consulting.

Aviation has the potential to make an important contribution to economic growth and development within Africa, the research found.

Air transport can open and connect markets, facilitating trade and enabling African firms to link into global supply chains.

It plays an especially pivotal role in just-in-time global manufacturing production and in speeding fresh produce from agricultural communities in developing economies to markets in the industrialised world.

Enhancing air connectivity can help raise productivity, by encouraging investment and innovation; improving business operations and efficiency.

Air transport is indispensable for tourism, where convenient air service facilitates the arrival of larger numbers of tourists to a region or country.

Recognising that this restrictive arrangement was limiting growth, many African nations adopted the Yamoussoukro Decision in 1999.

This agreement committed the 44 signatory countries to deregulating air services and to promoting regional air markets opening to transnational competition.

However, the implementation of this agreement has been slow and limited, and thus the potential benefits of liberalising intra-African air markets remain largely unrealised, the research showed.

Liberalisation can lead to increased air service levels and lower fares, which in turn stimulates additional traffic volumes, facilitates tourism, trade, investment and other sectors of the economy and brings about enhanced productivity, economic growth and increased employment, the research found.

Examples are, for instance, the agreement of a more liberal air market between South Africa and Kenya in the early 2000s led to a 69% rise in passenger traffic.

Allowing the operation of a low cost carrier service between South Africa and Zambia resulted in a 38% reduction in discount fares and 38% increase in passenger traffic.

Air service liberalisation is projected to bring about fare savings, greater connectivity and time savings for passengers.

- Fin24

  • Just Me - 2014-08-19 05:53

    Why don't we just make Africa one large country, governed by one parlimemt, one president and one currency unit, to be able to uplift Africa to 1st world status, compete on the global maket as one nation 2ith all our African resources? Wouldn't it be great to beat America at their own game.

      Brian Korobele - 2014-08-19 14:50

      Good Idea once Africa Unite All western Countries will suffer huge blow because they will be no more rib-off when comes to buying African product.. Western are step ahead the Idea of Euro can also work in Africa..

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