1.Introduction. 2.Yamoussoukro Decision. 3.Benefits. 4.Status of Implementation. 5.Challenges. 6.Wayforward

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2 1.Introduction 2.Yamoussoukro Decision 3.Benefits 4.Status of Implementation 5.Challenges 6.Wayforward 2

3 The IATA global air transport report of 2014 has revealed that African airlines have recorded a growth of 4.9 per cent, which reversed the year-onyear contraction experienced in June However, the capacity rose up to merely 4.5% and the load factor improved slightly to 70.2% in July 2014.The biggest factor impacting international traffic demand in Africa was the slowdown of the South African economy, coupled with the Ebola outbreak in West Africa. 3

4 The AfDB report of 2012 has predicted Africa to be the third fastest growing region in the world in terms of international traffic over the period with an average growth rate of 6.1% compared to the global average of 5.5%. This trend is expected to continue due to a number of factors, notably; robust economic growth, demographic boom, increasing urbanization, and emergence of the middle class. 4

5 Further economic growth is stifled by the hostile environment in which air transport performes - air services arrangements on the continent are still restrictive, denying the continent the potential for aviation to be an engine of growth and development. Some bilateral agreements are still restrictive in terms of capacity, frequency, designation, routes and tariffs. Seat based capacity still prevails in some agreements. 5

6 In addition, air transport in Africa is still characterized by: poor connectivity; high cost of air travel; high operating cost; lack of cooperation among African carriers; poorly run airport systems; lack of harmonized regulations; lack of adequate safety and security oversight; Inadequate and ageing fleet and infrastructure, distance and limited connectivity. Recognising limitations on economic growth as a result of the restrictive arrangement, African nations adopted the Yamoussoukro Decision in

7 African framework adopted in 2000 by the African Ministers responsible for civil aviation. Flows from the Yamoussoukro Declaration which was endorsed in 1999, by the Heads of States of the Organization of African Unity. Became fully binding in The development of Competition Regulations & Dispute Settlement mechanism as well as the establishment of an Executing Agency as key implementation Strategy. 7

8 Reform of the air transport industry and unification of the fragmented African air transport market. Full-liberalization of the intra-african air transport services by means of: o Elimination of restrictions on access, frequency, capacity and tariffs; o Exchange of free exercise of first, second, third, fourth and fifth freedom rights for passenger and freight air services; o Introduction of fair competition on a nondiscriminatory basis; and o Compliance with international safety standards. 8

9 Encourage and grow the intra-african trade and tourism. Connection of capital and major cities through efficient direct flights which encourages passenger and cargo growth. Increased routes and capacity which offer passengers choice. Increase competition amongst airlines which results in reduced air fares. Increase interconnectivity. Job creation. Increased cooperation in airline operations, codesharing and cross-border investments. 9

10 At a continental level, implementation has been slow and limited and thus the potential benefits of liberalising intra-african air markets remain largely unrealised. Some markets are liberalised to a significant extent but most remain largely closed, subject to restrictive bilateral agreements. Progress has been recorded at the regional and sub-regional level as exemplified by EAC and COMESA. 10

11 In southern and eastern Africa, air traffic is growing strongly around hubs in Johannesburg, Addis Ababa, and Nairobi. But in central and western Africa, the market is stagnant due to the vacuum tensions in Côte d Ivoire and the demise of several regional airlines (Air Afrique). The econometric study conducted by InterVistas in July 2014 found that African nations that liberalised air markets benefitted. 11

12 The study further found that interconnectivity and economic growth could be achieved by liberalising air markets between 12 countries within four subregions of Africa: onorth: Algeria, Egypt, Tunisia; oeast: Ethiopia, Kenya, Uganda; osouth: Angola, Namibia, South Africa; and owest: Ghana, Nigeria, Senegal. Traffic flows are projected to increase by 81%, from 6.1 million passenger movements to 11.0 million after liberalisation. An increase of 4.9 million passenger movements. 12

13 The study further states that South Africa s passenger traffic could grow by 54% if the Yamoussoukro Decision was implemented. Consumer benefits are estimated at $183-million, with additional jobs and an economic contribution of $283.9-million. South Africa has to date concluded 30 agreements which are YD compliant. Of the 30, 26 are active and 4 inactive. South African Airways operate air services to 23 countries in own right and 3 through codeshare.. 13

14 Majority of the YD agreements are with Western, Eastern and Northern States. The SADC market for South Africa is still strictly regulated through bilateral agreements. Seat regimes, restriction on designation, routes, capacity and frequencies still prevail has started in a very high note with 11 countries making a commitment to open up air services markets in Africa. 14

15 This commitment was made during the 24 th Assembly of the African Union in Addis Ababa, Ethiopia on the 30 th and 31 st of January The 11 countries are Benin, Cape Verde, Congo Republic, Cote d Ivoire, Egypt, Ethiopia, Kenya, Nigeria, Rwanda, South Africa and Zimbabwe. The States have committed to the establishment of a single Air Transport Market by

16 State protectionism for fear of disappearance of the national flag carrier. Consolidation of networks due to liberalization is causing some routes to grow others to decrease. Different levels of infrastructure development. Poor safety and security records. Lack of government commitment. Lack of a level playing field for airlines within their jurisdictions. Poor safety records due to ageing fleet Competition with carriers from other continents remains tough. Favorable traffic rights given to non- African carriers whilst denied to African operators 16

17 Fostering the African aviation industry may be one of the driving forces of regional integration on the continent and can boost intra-african business, trade, tourism as well as cultural exchange. Certain conditions critical in accelerating implementation of the YD namely: ointegrated African air transport policy ocompetition Regulations to avoid non competitive and predatory practices oeliminate or Reduce non-physical Barriers odispute Settlement Mechanism opassengers Protection Regulations 17

18 Stronger political commitment remains a critical element for the full implementation of YD Focus should be on strengthening intra-african relationships. Africans to realize that real competition is not between African countries/ airlines but between Africa and the rest of the world Strong African carriers to work together in improving social and economic benefits to States and for the continent at large 18

19 Full implementation of the Yamoussoukro Decision will guarantee the following for air transport in Africa: ocreation of larger markets for carriers; o Better equipped airlines able to compete favourably with stronger airlines from outside the continent; o Seamless intra-africa connectivity and creation of hubs; ocreation of jobs; oreduction in the cost of air travel; To achieve, greater commitment from all stakeholders required AU, AFCAC, Governments, RECs, Airlines, Airports, Air Navigation Service Providers, Ground Handling Companies etc. 19

20 Ngiyabonga 20