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Unlocking Africa’s potential via single air transport market

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The wait is finally over as Nigeria, alongside others, ratify Africa’s Open Skies pact. WOLE SHADARE looks at the huge impact it would have on the continent’s aviation sector.

 

 

Difficult air connectivity

Flying from London to Athens is not generally considered a massive undertaking. It’s a given that the journey will be direct, take three-and-a-half hours, and Europeans will not require a visa. The biggest decision is likely to be which meal to select in-flight. Now imagine if the same journey was routed via Moscow – ridiculous!

Yet that is the situation when travelling across Africa, where convoluted flight itineraries are unfortunately the norm. Let’s take the example of a trip from Algeria to Cameroon, as the crow flies, a journey the same length as London- Athens. There is no direct flight.

The fastest route, via Istanbul, takes 24 hours and involves three separate take-offs and landings. The less time-economical route can take up to 30 hours – half the time it took the Virgin Atlantic Global flyer to circumnavigate the globe. Adding insult to injury, the flight from Algeria to Cameroon costs 80% more than London-Athens. This is truly a disturbing paradox. Sadly, the problems caused by an unconnected Africa are not limited to inconvenient travel schedules.

Far bigger are the opportunity costs to the economies of the continent’s 54 nations and the region as a whole. Trade and tourism is hindered and investment opportunities lost. And it’s not just about economics.

Aviation connects people. Africa would be a less fragmented continent with greater air connectivity. Africa is home to 12 per cent of the world’s people, but it accounts for less than 1 per cent of the global air service market. Part of the reason for Africa’s under-served status, according to a just-published World Bank study, Open Skies for Africa – Implementing the Yamoussoukro Decision, is that many African countries restrict their air services markets to protect the share held by stateowned air carriers.

This practice originated in the early 1960s when many newly-independent African states created national airlines, in part, to assert their status as nations. Now, however, most have recognised that the strict regulatory protection that sustained such carriers, has detrimental effects of air safety records, while also inflating air fares and dampening air traffic growth. Indeed, African ministers responsible for civil aviation themselves acknowledged this in 1999, when they adopted the Yamoussoukro Decision, named for the Ivorian city in which it was agreed.

It commits its 44 signatory countries to deregulate air services, and promote regional air markets open to transnational competition. The benefits of connectivity are clear. Europe’s air liberalization was not only a coup for the industry but also passengers.

In the short space of eight years (1992-2005), the 100 year-old industry witnessed a surge in activity. Passengers enjoyed 88 per cent more flight options and double the number of seats. Suddenly travelling by air became accessible to all, with a 15 per cent drop in ticket prices.

Eliminating physical barriers

The benefits of a connected continent are clear. So why do nonphysical barriers remain? While open skies pledges – 1988 Yamoussoukro Declaration and 1999 Yamoussoukro Decision – are being signed by most African countries, implementation has been unhurried and restricted. Protectionist policies favouring national airlines remain abundant. This is unhelpful.

The continent cannot take off economically while its runway is incomplete. Governments in Africa need to treat aviation as a strategic asset and not as an instrument of foreign policy. Africa’s past has long been defined by national insularity; its future lies in liberalization. Where better to begin than its skies?

How it was established

As a result of the enormous benefits liberalisation would bring to the continent, in 2015, the Assembly of Head of States and Government adopted the Declaration (Doc. Assembly/ AU/Decl.1 (XXIV)) on the Establishment of a Single African Air Transport Market and also issued a commitment (Assembly / AUC/Commitment/XXIV), to the immediate implementation of the Yamoussoukro Decisions towards the establishment of a single African air transport market by 2017.

Eleven African Member States championed the Declaration by signing the Solemn Commitment to actualise the Decision creating the single market. These Member States were constituted as a working group at Ministerial level (Ministerial Working Group) with responsibility to follow-up the implementation of the single market and spearhead the advocacy campaign to urge more Member States to join the single market. The African Union Commission was entrusted with the functions of coordination and facilitation of the process of operationalization of the Single African Air Transport Market. The 11 champion states that signed the initial commitment are namely: Benin, Capo Verde, Repub-lic of Congo, Côte d’Ivoire, Egypt, Ethiopia, Kenya, Nigeria, Rwanda, South Africa, and Zimbabwe. The solemn commitment is open for other states to join.

Market size

The current size of the Single African Air Transport market is comparable to the COMESAEAC-SADC Tripartite free trade area with 26 countries, a population of 527 million persons, a Gross Domestic Product (GDP) of $624 billion and per capita income of US$1,184.

Joining the Single African Air Transport Market is based on a variable geometry principle in accordance with Member State’s commitment to implementing the decisions/declarations of the Assembly.

Secretary-General of African Civil Aviation Commission (AFCAC), Ms. Iyabo Sosina, at the sensitization workshop on the commencement of SAATM in Lagos last week enumerated the benefits of the scheme. Sosina disclosed that the 23 countries that have declared for single air transport market have a combined population of roughly 670 million, more than half of the population (57%) of the continent in 2015, stressing that their combined GDP amounted to $150billion in 2015. She noted that this could double to $300billion because of the enormous benefits it would bring to the continent.

The AFCAC scribe stated in 2015, 63.5 million international tourists were recorded in the continent and the 23 countries accounted for over 54 per cent of international visitors, hinting that the number of countries that have signed the solemn commitment offer significant single air transport market space in terms of traffic volumes and airport infrastructure. In 2015, Africa was reported to have handled 180 million passengers with over 56 per cent passing through airports within the current single market area, whilst airlines within the 23 countries accounts for more than 80 per cent of the intra- African traffic. She listed the 23 countries that have signed the solemn commitment that has increased from 11 as Nigeria, Benin, Burkina Faso, Botswana, Cape Verde, Republic of Congo, Cote d’Ivoire, Egypt, Ethiopia, Gabon and Ghana. Others are Guinea Conakry, Kenya, Liberia, Mali, Mozambique, Niger, Rwanda, Sierra Leone, South Africa, Swaziland, Togo and Zimbabwe.

Nigerian carriers kick

As laudable as the policy is, airline operators under the aegis of Airline Operators of Nigeria (AON) said they were not ready for SAATM implementation. Chairman AON, Capt. Nogie Meggison, who spoke on behalf of airline owners and investors, objected to implementation of the treaty. He questioned the win-win claims of open skies, saying the treaty is rather a subtle ploy to ensure Nigeria, with about 65 per cent of West African population, loosen up to the benefit of other smaller countries. He argued that the move cannot be in the best interest of Nigeria where there is no uniform platform for fair competition or adequate consultation with carriers.

His counterpart representing the Aircraft Operators of Nigeria (AON), Capt. Mohammed Joji, added that Nigeria cannot be talking about sky liberalisation where local policies have not favoured local carriers to face their African counterparts. Joji reiterated perennial problems of foreign exchange, Value Added Tax (VAT), multiple taxation and high cost of aviation fuel, policy flip-flop among others that have collectively killed over 50 airlines in the last 18 years.

Last line

Not a few noted that there is potential for aviation growth in the region with the emergence of a middle class market that needed to be tapped for the growth of aviation in the region.

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Aviation

AIS authorisation: All motion, no movement

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Since 1998, it has been more of rhetorics than actualisation of yet-to-be-completed Aeronautical Information Service (AIS) automation. WOLE SHADARE writes that the project may end up as another white elephant project

 

Time factor

Today, we live in a world in constant motion where time and information are becoming more precious. No one wants to lose a minute at doing nothing. It is by integrating this reality that the International Civil Aviation Organisation (ICAO) is developing daily, the critical role of AIS to meet global challenges.

The objective of the AIS is to ensure the flow of information necessary for the safety, regularity and efficiency of international air navigation. When completed, it will enhance air to ground and ground to ground information and boost interconnectivity between aircraft and air traffic controllers.

The AIS is installed in 11 locations and is planned to go on stream at the end of the year but would connect every part of the country by the end of 2017.

To achieve success, all the key agencies or data originators including the Nigerian Civil Aviation Authority (NCAA), Federal Airports Authority of Nigeria (FAAN), Nigerian Meteorological Agency (NIMET), Accident Investigation Bureau (AIB), Nigerian College of Aviation Technology (NCAT), National Emergency Management Agency (NEMA), Nigerian Air Force, etc would need to enhance their data collation, origination, processing, storage and exchange system.

The deliverables

Other deliverables, according to the NAMA boss, would include the enhancement of e-NOTAM, e-Flight Planning, e-AIP, e-TOD, e-Charts, e-Flight briefing and also boost capacity for voice and data communication for both air to ground and ground to ground communication. ICAO Annex 15 states that the AIS shall use automated pre-flight information systems to specify that pre-flight information must be made available at each aerodrome /or heliport normally used for international operations.

This includes all aerodromes/ or heliports designated for regular use by international commercial air transport as listed in the relevant ICAO regional plans and any aerodromes/ or heliports serving as alternates to these regular aerodromes/heliports.

The challenge

The greatest challenge now lie with the NAMA, the NCAA, aviation institutions especially, the NCAT to accelerate the rate of AIS development to keep abreast of the new requirement arising from global demands as Nigeria cannot afford to continue to queue behind surrounding smaller African countries.

Stagnation

Nigeria has over the years remained stagnant with the automation of AIS. While Nigeria has remained stuck in the same position, many have or are moving towards Aeronautical Information Management (AIM).

The aeronautical information/data based on paper documentation and telex-based text messages cannot satisfy anymore the requirements of the ATM integrated and interoperable system and therefore the AIS is required to evolve from the paper product-centric service to the data-centric aeronautical information management (AIM) with a different method of information provision and management.

For that purpose, ICAO has developed a roadmap to reflect the importance of the evolution and to address the required changes and is being referred to as the transition from AIS to AIM.

The roadmap identifies the major milestones recommended for a uniform evolution across all regions of the world, the specific steps that need to be achieved and timelines for implementation.

The transition to AIM will not involve many changes in terms of the scope of information to be distributed. The major change will be the increased emphasis on data distribution, which should place the future AIM in a position to better serve airspace users and ATM in terms of their information management requirements.

It would be recalled that the global aviation regulatory body, ICAO had since 1998 sensitised all contracting state on the need for the services of AIS to be automated. Ever since 1998 in Nigeria, it has been more of hearing and reading on the pages of newspapers of AIS automation and it yet to be completed.

Little progress

In the last five years, a lot of progress had been made in this regard. Before now, fund had been the recurrent impediment of this project. However, since 2016, the story has changed. Immediate past President of Aeronautical Information Management Association of Nigeria (AIMAN), Mr. Shittu Babatunde, stated at the just concluded delegate conference/World AIS Day Celebration held in Ibadan, Oyo State last weekend that he was at a seminar in 2015 where he said they were told not to expect the completion of the project even in 2017.

His words, “That has come to pass. At the user’s end of AIS nationwide, the effect of the project is yet to be seen in our day-to-day operations. While we appreciate the progress so far made by the Ministry, NCAA and NAMA management in this regard, I appeal to once again the Federal Government to see that this project does not become an elephant project”. Not a few are impressed. The international world is not going to wait for the country.

The world is now transiting to System Wide Information Management (swim). November 2015 was the deadline for contracting states to implement Electronic Terrain and Obstacle Data (ETOD), which is far more expensive than the automation and Nigeria is yet to start this.

A must-do for NAMA

Managing Director of NAMA, Capt. Fola Akinkuotu reiterated that the agency is aware of the critical deliverables of the Aeronautical Information Management (AIM) project such as the enhancement of e-NOTAM, eFlight Planning, e-AIP, e-TOD, e-Charts, e-Flight briefing and so on.

He said given that the digitalisation represents migration to a dynamic data-oriented aeronautical information management system that facilitates the real-time exchange of aeronautical information in an accurate and standardised format from anywhere to everywhere globally, “the automation project is a must-do for NAMA.”

He said notwithstanding the scarce resources, NAMA would leave no stone unturned to ensure that the AIS Automation process remained on course and completed. The NAMA helmsman lauded staff of the AIS department for their diligence, hard work and dedication to duty.

Last line

AIS remain one of the most critical departments in the agency even though they are hardly given the prominence they deserve, because their job most often, is behind-the-scene. The absence of AIS in the system will bring about chaos in the entire civil aviation.

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Aviation

Tourism-transport summit garners support from aviation agencies

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Aviation agencies have expressed commitment to participate in the Tourism Transport Summit/Expo being anchored by the Institute of Tourism Practitioners (ITP) for the Ministries of Transportation and Ministry of Information, Culture and Tourism.

Agencies such as Nigerian Civil Aviation Authority (NCAA), Nigerian Airspace Management Agency (NAMA), Nigerian Meteorological Agency,Nigerian College of Aviation Technology (NCAT), Zaria and the Accident Investigation Bureau (AIB) will participate in the summit with theme: ‘Tourism and Transportation: The Key Sectors for Sustainable Resilient Growth and Development’.

In a statement signed by the organizers of the event, Institute of Tourism Practitioners (ITP), the two-day summit is the first edition in a series to be organized annually and is scheduled to hold at the International Conference Centre (ICC), Abuja from 21st – 22nd May, 2018.

The statement highlighted that transportation and tourism is predicted to be one of the world’s highest growing sectors in the new century, creating more jobs and increasing the Gross Domestic Product (GDP) of most countries of the world.

The organizers stated that the Summit and Expo are created to build strong synergy and chart the way forward to grow and enhance the two sectors. Other Sub themes of the Summit that includes Potentialities of Developing Regional Inter-Connectivity in Transportation and Inter-Modal Connectivity, Traveler Safety and Security; Licensing Regulations and Oversight–Meeting the International Standards for Sustainable Development of the Transportation and Tourism Industries; and Building Capacity for Global Best Practices in the Tourism and Transportation Sectors.

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Aviation

Airlines jostle for Nigeria’s recovering domestic market

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Many airlines have applied for operating licences, but majority fell by the way side even before they started, while others are at the verge of scaling the hurdles. WOLE SHADARE examines the projected over-capacity on the route if eventually the carriers get their Air Operator Certificate (AOC)

 

Enthusiasm

They came with the hope of getting the all-important AOC. The tedious process had made many of them to fall by the way side. That is the fate of over 26 prospective airlines that were eyeing the domestic aviation market.

 

A total of 32 airlines made up of scheduled and non-scheduled operators are currently listed as holding AOC and are on the register of the Nigerian Civil Aviation Authority (NCAA) as at January 10, 2017 till date.

 

Airlines are categorised into scheduled and non-scheduled on the strength of the type of operations they carry out. A scheduled flight is a trip by airplane that has been planned for a certain time and date. Airlines sell tickets for scheduled flights to help travellers get from one destination to another.

 

The eight airlines that operate scheduled passenger operations are Aero Contractors, Arik, Overland Airways, Medview, Dana, Air Peace, AZMAN and First Nation Airways. A country’s civil aviation authority gets the power to issue AOC to an aircraft operator to allow it use aircraft for commercial purposes.

 

This requires the operator to have personnel, assets and system in place to ensure the safety of its employees and the general public.

 

The certificate lists the aircraft types and registrations to be used, for what purpose and in what area – specific airports or geographic region.

 

Meanwhile, two of the airlines, out of the 32, ceased to be regarded as airlines, owing to the expiration of their certificates.

 

 

Carriers with active AOC

 

The 30 other airlines with active AOC are Aero Contractors with AOC number CAN/ AOC/12-12/08 valid till January 1, 2019, Allied Air AAL/AOC, 07- 13/003 valid till July 30, 2017, Air Peace APL/A0C/09-14/001 valid till September 7, 2018, Arik Air RIK/AOC/07-10/01 valid till July 11, 2018, Associated Aviation ASS/ AOC/06-15/001 valid till May 31, 2017.

 

Azikel Air AZK/AOC/07-16/001, AZMAN Air AAS/AOC/05-14/002, Bristow Helicopters BHL/AOC/12- 14/002, Caverton Helicopters CH/ AOC/11-14/001, Dana Airlines DAN/ AOC/11-1808/01 and Dornier Aviation DAA/AOC/06-15/002.

 

Others are Executive Jet Services ELS/AOC/03-15/002, First Nation FNA/AOC/10-11/02, Gyro Air Limited GAL/AOC/10-16/001, HAK Air HAK/AOC/04-12/001, Izy Air IZY/AOC/12-15/001, Jed Air JED/ AOC/06-13/002 and King Airlines AAX/C/024.

 

Also included are Max Air MAX/ AOC/06-13/001, Medview Airline MVA/AOC/03-14/001, OAS OAS/ AOC/03/14/002. Others are Overland Airways OAL/AOC/03/14/001, Pan African Airlines PAN/AOC/12-14/001, Skybird Air SKYBIRD/AOC/04-13/08, Skyjet Aviation Services Limited SKL/AOC/12-12/07, Skypower Express Airways AAR/C/018 and West Link Airways WLA/AOC/02-11/002.

 

Also on the list are Nestoil Plc NOL/AOC/03-15/002, OMNI BLU Aviation Limited OBA/AOC/12-15/002 and Top Brass Aviation Limited TBA/ AOC/11-11/03.

 

 

Hurdles

 

Spokesman for NCAA, Mr. Sam Adurogboye, disclosed that there were five phases an airline underwent before completing the certification process and many airlines faltered on the way.

 

There is the pre-application phase – when the airline makes enquiry about the processes, followed by the document compliance phase, which involves a certification team reviewing applicant’s documents for compliance acceptance/approval.

 

The others are AOC process, also called demonstration and inspection phase, which involves evaluation by a certification team and applicant’s demonstration of compliance evaluation of management effectiveness, inspection of station(s) facilities, flight operations, maintenance and records.

 

The next is called certification phase, which allows the intending operator for approval of AOC and Operation Specification with coordination with Director for Safety Oversight and DG NCAA.

 

 

Determination

 

While some have fallen by the wayside, others are forging ahead in processing their AOC. There are fears that there would be over capacity on a lean domestic air travel market if some of them succeed in seeing through the process that could land them the licence to operate. They would be jostling for a small air market of about 10 million passengers annually.

 

Many of the routes are very unviable except for the triangular routes of Lagos-Abuja and Port Harcourt and to a large extent, Enugu.

 

A leading airline official said it doesn’t add up in situations where airlines in a bid to woo passengers will have to charge airfares in naira that are as low as N18, 000 to N22, 000 on routes where you fly for almost 45-50minites.

 

“That’s already like running at a loss. In the United States, no airline does a 50 -60 minutes flight and charges $60 (about N25,000), which is what the airlines are doing right now in Nigeria,” he added.

 

 

Backlash fear

 

Fearing a public backlash should they come out openly to announce increase in air fares, most airlines have opted to such subtle measures as raising fares on competitive routes (such as the Lagos, Port Harcourt and Abuja) or those routes that they enjoy a sort of monopoly, while lowering fares on those with fewer number of passengers.

 

“We do aircraft maintenances in dollars, buy spares in dollars, pay for insurance in dollars, and even buy fuel in dollars. What the CBN supplies is still not sufficient for us. Most of us still get dollars at the parallel market. And by the time we are converting earnings in naira into the dollars, it becomes very obvious in simple economics that the current fares have to go up by more than 60 per cent if airlines must continue to fly and be profitable,” said an airline’s spokesman.

 

“To be honest, the cheapest or most realistic fare Nigerians should be paying on any route within the country should be N40, 000,” he added.

 

 

Expert’s perspective

 

Former Commandant, Murtala Muhammed Airport, Group Capt. John Ojikutu (Rtd) said, “Let us be honest, the Nigerian domestic airlines cannot be selling passenger flight tickets at N25,000 to Abuja if the dollar is selling at N360 to $1, the same price it was selling two years ago when dollar was at N200 to $1.”

 

“The present cost of aviation fuel, the high operational cost cannot justify the air fare of N25,000 for an hour flight anywhere in Nigeria. The high operational cost also cannot be sustained except the airlines short change service providers and the supporting agencies or there are inflows of cheap monies coming from sources to sustain their operations”.

 

 

Last line

 

New entrants would be worst hit because the current ticket prices are not in sync or responsive to current realities and this is due to unhealthy price wars and pursuit of market dominance at the domestic side of airline business.

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