Reaping the economic benefits of open skies in Africa is an ideal that has so far basically failed to launch, despite almost 40 African States (including SA) having signed the AU’s Single African Air Transport Market (SAATM) agreement, since 2018.
SAATM’s goal is to reduce restrictions on air service agreements so that airlines can operate more freely across the continent. SAATM is regarded as one of the keys to successfully implementing the African Continental Free Trade Area (AfCFTA).
Together, the SAATM signatories represent more than 80% of the aviation market in Africa, according to the International Air Transport Association (IATA), which supports the initiative and estimates that, even if just 12 key countries in Africa opened their skies and increased connectivity, an extra 155,000 jobs and $1.3bn in annual GDP could be created in those countries.
During IATA’s recent AGM and summit in Delhi, India, the airline association’s director-general, Willie Walsh, told Business Day that if open skies do not materialise, Africa’s share of global aviation would probably remain at about 2% for the next 10 years.
“The structure of the industry [in Africa] is so expensive due to it being such a fragmented market. It will take governments to work together [to tap] what I believe is an impressive opportunity for Africa,” said Walsh.
A spokesperson for SA’s transport department told Business Day that for SAATM to succeed, AFCAC should advocate for strengthened political will and commitment; improving regulatory and policy harmonisation; enhancing infrastructure and airspace optimisation; and facilitating intra-African mobility. The department agrees that regulatory barriers, including restrictive bilateral agreements, hinder SAATM’s progress.
A legal perspective
For aviation law expert Chris Christodoulou, at the heart of the failure to implement SAATM is the Bilateral Air Services Agreements framework SA has with some 33 AU states that are part of SAATM. In his view, these have been used by most SAATM signatories to “restrict new entrants and arbitrarily demarcate market share for stated-owned airlines”.
“Complicating matters from a legislative perspective is that we are faced with divergent legal systems across member states. It has been argued that a way to fast-track domestic changes to the regulations is to distribute ready-to-adopt model regulatory texts,” he adds.
For Zeyn Bhyat, executive corporate commercial at global law firm ENSafrica, the issue of how SAATM could be salvaged is more a political than a legal question.
“The relevant states of the AU need to co-ordinate and lobby each other (as with any other treaty) to see that SAATM is fully implemented. There is no surrendering of sovereignty — more of a levelling of the playing fields, aiming to make negotiations of air-routes (and rights) simpler and quicker by being multilateral. The world is not going to wait for Africa to catch up,” says Bhyat.
Aviation economist Joachim Vermooten agrees the current state of affairs implies that reciprocity (a tit-for-tat approach) for the airlines remains a limiting factor for SA to achieve a more liberalised African air transport environment. The interests of trade and tourism should also be factored into the considerations and not only those of airlines.
“Every step towards liberalisation (removal of barriers to trade) has beneficial effects to the economy, GDP, employment, trade and tourism as have been demonstrated in numerous economic studies,” says Vermooten. “If SA wants to gain economically from AfCTA, it needs to adopt a liberal approach on air transport liberalisation.”
An airline perspective
Aaron Munetsi, CEO of the Airlines Association of Southern Africa (AASA), says SAATM is grossly misunderstood by many: AFCAC has completed the review of its articles, thereby giving itself the authority to intervene where necessary and ensure that all signatories of SAATM implement the project. Of note is the SAATM PIP (Pilot Implementation Project), which was rolled out specifically to ensure the states that had signed up for SAATM were given all the assistance they needed to implement it in its entirety.
Kirby Gordon, spokesperson of FlySafair, said that to salvage SAATM, it would take a synchronisation or harmonisation of aviation laws across countries, and fair competition frameworks would be important too.
“Open skies should be seen as a growth opportunity for all — not a threat. And various carriers will be able to find various niches to serve efficiently depending on the models they operate by,” said Gordon.
An SAA spokesperson said the airline supported the implementation of SAATM as a vital step towards enhancing connectivity and economic growth across Africa. Realising its benefits required a stronger commitment from governments, harmonised regulations and strategic airline partnerships. The spokesperson said SAA was committed to playing a strategic role within SAATM, and the airline supported the efforts of the SA government in that regard.
For Dr Namhla Tshetu, executive manager of corporate services at Airlink, it would be key to harmonise the regulations that would underpin SAATM. It would be easier to do that first at regional economic community level, she said. There also needed to be a common set of punitive measures.
“There has to be better consultation and buy-in with all role players in the same room at the same time. Abolish bilateral air services agreements as they were designed for a time when there was no private sector participation in the industry and it was highly regulated at a state-to-state level,” Tshetu said.
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