Open skies the key to African growth

INAUGURAL conference speeches don’t usually grab attention the way the opening salvos did at the recent Airlines Association of Southern Africa annual general meeting in George.

Talk of a domestic aviation industry in crisis, a catastrophic plunge in inbound tourist numbers, international airlines eating the locals’ lunch, lack of political will to open up African skies and inconsistent government policies culminating in the new and disastrous visa regulations certainly pulled no punches.

African airlines should be leading the drive to bring visitors to a continent rich in diversity and cultures with some of the world’s best scenery and natural attractions. Instead, African aviation is stagnating and Southern Africa’s inbound tourism trade is in a nosedive. The conference theme of “unlocking tourism growth opportunities through aviation in Africa” had a subtext: governments, get your acts together.

Association CEO Chris Zweigenthal pleaded with the government to end the interdepartmental standoff on visa regulations that are having a negative effect on tourism, one of the few sectors capable of creating jobs and boosting SA’s economy.

He spoke of an aviation environment embroiled in unprecedented levels of tension, frustration and animosity amid conflicting and competing government policies and departmental agendas working against one another and the nation’s interests.

SA ought to be cashing in on the weak rand and the bargain it represents as a business and tourism destination. Instead, the figures on tourism’s decline are startling.

Last year, China and India showed the biggest falls of 24% and 9% respectively, while Chinese and Indian tourists to Australia leapt 10% and 15% each. Chinese visitors to Mauritius were up 67%, while statistics to June this year show a drop of 30% to SA.

African aviation accounts for only 3% of global passenger traffic, although it has 15% of the world’s population on 20% of the world’s land mass.

It gets worse. International airlines are carrying 82% of the traffic to and from Africa, while African airlines carry only 18%.

Although last year saw a global aviation turnaround, with 4% average margins, up from a long-term 1%, profitability for African airlines is the biggest challenge.

Global average profit per passenger is $8.27, while in Africa it is $1.59. High infrastructure charges, taxes, too many small state-owned and unprofitable airlines and a lack of cooperation among African states all contribute, but the core problem is low passenger volumes and a high cost per seat. The still small middleclass population means few can afford to fly.

Average aircraft occupancy in Africa is about 65% against 80% globally. The solution is strong economic growth to boost the middle class.

Key to African aviation and economic growth is open skies. The failure of African governments to implement the Yamoussoukro Decision to deregulate air services and to open regional air markets to transnational competition is a direct barrier.

Sixteen years after the decision, only 11 of the 44 signatory countries have signed, including SA and Zimbabwe. An independent report commissioned by the International Air Transport Association (Iata) found that implementing it in 12 key African markets would create 155,000 jobs, $1.3bn in annual gross domestic product (GDP) and potentially 5-million new passengers a year. For SA, this would mean 14,500 jobs and $284m in GDP, says Iata.

Political will to open African skies to drive the continent’s growth, trade and tourism needs to override nationalist concerns.

Aviation and tourism have a symbiotic relationship and both need to succeed. In SA, of urgent concern is the alignment of conflicting policies and agendas between government departments dealing with travel and tourism. The government needs to get its act together before it is too late for these two critical industries.