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Yds First
YDs first television commercial_Mentorship Program.flv
Air News On Air Liberalization In Africa
African Airlines have limited access to global markets through alliances and partnerships. They have fragmented and poor market networks even within Africa where the skies are regulated by complete protectionist bilateral air service agreements (BASAs).
This is illustrated by the absence of efficient air transport services between African nations in some regions. At times travelers are forced to go to Europe on transit flights en route from one African nation to another.
Among other problems, the restrictions imposed by BASAs are major contributing factors for the poor market network African carriers operate. Former Secretary General of the African Airlines Association (AFRAA), Christian Folly-Kossi, comments: "African airlines hardly forge partnerships among themselves. The BASAs have definitely limited their market access. This has affected their market reach and scope. A single airline, even if it is very big, cannot have presence in all the markets worldwide because by doing so would cost it dearly."
While African airlines are suffering from poor market access as the result of the protectionist air service agreements.non-African carriers are taking advantage to develop their network in Africa.
"Mega carriers from the Middle East and Europe are dominating African skies," said Girma Wake, CEO of Ethiopia n Airlines, which serves 35 international destinations in Africa. Wake added:" What we should know is that foreign airlines are carrying 75% of the air traffic between Africa and other regions. Industry analysis agrees that the protectionist BASAs is hampering the development of the airline industry in Africa."
Certainly, African civil aviation authorities recognize the impact of the BASAs on air transport development. Accordingly, they started taking measures which would enable them to address the issue of market access years back. With the view of liberalizing the internal African air transport market in October 1988,African civil aviation ministers met in Yamoussoukro in the Republic of Cote D' Ivoire and signed the Yamoussoukro Declaration on a new African air transport policy.
Following the implementation of air liberalization policies in the US and Europe, African states in 1988 arrived at the general consensus on the need to draft a new policy that requires the liberalization of the African airline industry. This agreement dubbed the Yamoussoukro Declaration intends to avoid the bilateral air service agreements (BASA) that impose several restrictions on African carriers and rather create a single domestic market in Africa. Unfortunately this has never been realized and the African air transport market is still hampered by restrictive BASAs.
This declaration was the result of a collective consensus that African nations must prepare for the adverse effects of deregulation in the United States and the air transport liberalization policies of Europe.
Since the coming into being of the Yamoussoukro Declaration (YD), the issue of market access has been at the centre of development strategy of the air transport sector in Africa. The main aim has been to take away limitations imposed by the various bilateral and multilateral agreements, to create a single domestic air transport market in Africa.
Tewodros Tamrat, director, corporate and industry affairs with AFRAA, explains: "The main trust of the YD is the liberalization of the internal African air transport market. It is intended to remove restrictions imposed by the bilateral air service agreements which are the basis of service agreements which are the basis of the relation between states currently."
Tamrat, a member of the YD monitoring body under the auspices of the African Union, said these agreements normally specified and limited the number of airlines that could be designated to operate on specific routes; the type of aircraft capacity and the frequency and aircraft capacity and the frequency and the airports into which airline would be allowed to operate.
"It may also require airlines to obtain approvals from the respective countries on the type of fares and terms and conditions they should apply.
"Furthermore, traditional BASAs require substantial ownership of the airline by the national government of the designating state if an airline is to be allowed by the other state to operate to/from its country."
Tamrat believes the removal of these restrictions will give airlines the freedom and flexibility to operate whenever and wherever it is economically viable and profitable within the African market.
"It will enable airlines to establish an efficient route network, allowing efficient utilization of their aircraft capacity. More importantly, it will allow competition among African airlines encouraging them to be more efficient and provide lower fares and quality service to consumers.
"The increased competition within the region will strengthen the African carriers and prepare them for the inevitable liberalization and globalization of the international market."
He added: "As accesses to Africa markets are reserved for African carrier's time and space to grow and strengthen their competitive strength without being crashed by competition from the international mega carriers."
According to Tamrat, African traffic in many countries is of low density and fragmented limiting the growth potential of African airlines. He commented:" It also restricts connectivity and limits frequency at times forcing passengers to go via Europe to travel between two African countries.
"The opening up the internal market will give airlines the opportunity to consolidate the traffic, create economies of scale and allow them develop regional and sub-regional hubs. This, in turn, will enable them generate sufficient traffic on a sustainable basis to feed into their international flights."
Yamoussoukro Decision
The Yamoussoukro Decision of 1999 having been endorsed by the Heads of States of the then OAU, entered into force in 2000 with a two-year grace period. The decision was supposed to have been fully implemented by August 2002 and should have replaced by bilateral or multilateral agreement on air services between parties which are incompatible with the decision.
However, to date the Yamoussoukro Decision has not been implemented .Nine years after its adoption by African heads of State; issues of market access remain regulated by a complete system of protectionist bilateral service agreements.
As a result, the air transport in Africa continue to suffer from many dysfunctions including poorly developed network of scheduled services, prohibitive cost of air travel and loss of market share to mega carriers from Europe and the US.
The mega foreign carriers continue to capitalize on the weaknesses of the bilateral systems to make inroads into the domestic African market. The foreign carriers are poised to make even deeper inroads with the new EU community clause and negotiating mandate, to which Africa is yet to develop a common position.
Major Challenge
Folly-Kossi said that the major challenge in the implementation the Yamoussoukro Decision was that some of the institutional and legal frameworks required for the implementation of the decision had not yet been put in place.
"These are the executive agency, competition regulations and dispute settlement mechanisms. The executive agency, once established, will have the authority not only to follow-up, but also to enforce implementation of the decision,"Folly-Kossi said.
AFRAA, in cooperation with NEPAD, recently started a new initiative that will facilitate implementation by States that are willing and ready to start the process without waiting for others to start at the same time. Folly-Kossi said the new initiative which had an acronym "CREW" (club of ready and Willing) had received support by various states and would be launched as soon as preparation was completed.
The prompt and uniform implementation of the YD is seen by many Africa as a key factor for the transformation of Africa's air transport industry.
However, some Africa countries with small and weaker airlines are concerned that full implementation of the Yamoussoukro Decision may lead to the disappearance of their airlines as a result of anti-competitive behavior such as abuse of dominant position by bigger airlines.
These countries have been demanding the establishment of competition regulation to ensure fair competition and a level playing field for both big and the small airlines.
Countries like Ethiopia, Kenya, Morocco, Egypt and South Africa are demanding for the full implementation of the YD.
Folly-Kossi said that to address the issue, the three African regional economic communities (COMESA,SADC,EAC) had put in place joint competition regulations which were anticipated to be implemented soon. He added that ECOWAS was also in the process of adopting competition regulation for its region. The AU was also working to establish harmonized continental competition regulations.
Folly-Kossi hopes that all these efforts will address the concern of some of the countries which have reservations on the full implementation of the YD.
Slow Pace
"YD implementation is progressing very slowly. Much of the progress made both at continental and regional level is in the area of putting in place the legal and institutional framework required for implementation," said Tamrat.
The AU and the African Civil Aviation Commission (AFCAC) have been working to finalize the outstanding legal and institutional framework. This includes establishing the executing agency. It has been decided by the African Ministries of Transport that AFCAC be the executing agency of the YD.
However, work to provide the necessary legal document that will enable AFCAC to take the responsibility (that is, amendment of the AFCAC constitution) has not been finalized. The AU and AFCAC are working to finalize this document which will need to be adopted and signed by African States.
The absence of an executing agency has been one of the main stumbling blocks for the speedy implementation of the YD.Many African States, particularly those with small airlines, have expressed the view that the absence of a competition regulation is the reason why they are reluctant to implement YD.
In the absence of a level playing field they fear their small airlines may not survive .The YD itself requires that a competition regulation to be put in place.
In this respect, the AU has hired a consultant to prepare a harmonized continental regulation, which is expected to be submitted to the next Ministerial meeting of the AU.
Dispute resolution mechanism is also envisaged under the YD and so far it has not been established.
The AU has also engaged the service of a consultant to prepare a dispute settle-ment mechanism for dispute arising among states relating to the YD.
Much more progress has been made in the various Regional Economic Communities on the implementation of the YD. Again here most of the work is in putting in place various regulations that are required to implement the YD such as competition laws, airline licensing, safety oversight, and consumer protection. ECOWAS, UEMOA, BAJUL Accord Group in West and Central Africa and EAC, COMESA, and SADC in East and Southern Africa are working together on the harmonization of their various air transport rules and regulations.
Tamrat commented:" In all cases we see in the continent an encouraging trend toward fewer restrictions on traffic rights, capabilities and frequencies .However, these are still done on a BASA basis and not necessarily based on the YD."
Wake agreed with what Tamrat said about the slow pace of the effort to implement the YD.However, Wake said it was not discouraging."There are some developments though they are happening slowly.
‘What we must know is that while we are debating on liberalization, foreign airlines are carrying the majority of the African air traffic. Whether the YD is implemented or some airlines will prosper and others will lose.
"The implementation of the YD will bring more opportunities. Ethiopian has signed open skies agreement with more than 20 countries based on the principles of the YD," he said.
AFRAA is calling on the AU for a strong political push on member states towards the full implementation of the YD.
"We should not wait for all the 53 countries to implement the YD at once," Kossi said."Let us start with those which are ready and willing to implement and others will follow."
About the Author
Anthony Juma is the Editor and Senior Aviation Director at Wings Over Africa Aviation.
This is an Air Charter Company that specializes on Articles On Air News On Air Liberalization In Africa. The website has guided thousands of travelers to achieve their dream holiday. For more information and guidance, visit the site at http:// / www.wingsoverafrica-aviation.com/index.php/sheduled-flights.html
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