Airlines experience delay repatriating funds in Nigeria, Angola, others – IATA … aviation contributes $72.5 billion in GDP to Africa

By Gboyega Oni

Aviation has contributed $72.5 billion in Gross Domestic Product (GDP) to economy in Africa as 6.8 million jobs are provided by the sector and over the next 20 years passenger demand will expand by an average of 5.7% annually, says the Director General/CEO, International Air Transport Association (IATA), Alexandre de Juniac.

Alexandre de Juniac said African governments must enhance safety efforts, enable airlines to improve intra-Africa connectivity,  unblock airline funds, avoiding air traffic management re-fragmentation and over-investment and ensure that Africa has the professionals it needs to support the industry’s growth and deliver maximum economic and social benefits in Africa.

The IATA’s CEO, who was represented by Raphael Kuuchi, IATA Vice President, Africa, stated this at the 49th African Airline’s Association Annual (AFRAA) General Assembly in Kigali, Rwanda.

de Juniac said airlines on the continent experience varying degrees of difficulty repatriating revenues earned from their operations in Angola, Algeria, Eritrea, Ethiopia, Libya, Mozambique, Nigeria, Sudan and Zimbabwe, saying that practical solutions were needed so that airlines can reliably repatriate their revenues.

According to him, “aviation currently supports 6.8 million jobs and contributes $72.5 billion in GDP to Africa. Over the next 20 years passenger demand is set to expand by an average of 5.7% annually.

“Africa is the region with greatest aviation potential. Over a billion people are spread across this vast continent. Aviation is uniquely placed to link Africa’s economic opportunities internally and beyond. And in doing so, aviation spreads prosperity and changes peoples’ lives for the better. That’s important for Africa. Aviation can help in achieving the UN’s Sustainable Development Goals, including the eradication of poverty and improving both healthcare and education.

“Africa also faces great challenges and many airlines struggle to break-even. And, as a whole, the African aviation industry will lose $1.50 for each passenger it carries. Governments should be aware that Africa is a high-cost place for aviation. Taxes, fuel and infrastructure charges are higher than the global average. Additionally, insufficient safety oversight, failure to follow global standards, and restrictive air service agreements all add to the burden that stands in the way of aviation’s economic and social benefits.”

Speaking on safety, he said “safety in Africa has improved. In 2016 there were no passenger fatalities or jet hull losses in Sub-Saharan Africa. When turbo-prop operations are included, Sub-Saharan Africa recorded 2.3 accidents per million flights against a global average of 1.6 accidents per million flights.

“African safety has improved, but there is a gap to close. Global standards such as the IATA Operational Safety Audit (IOSA) are the key. Performance statistics for IOSA show that the accident rate of the 33 IOSA registered carriers in Sub-Saharan Africa is half that of carriers not on the registry. That’s why I urge African Governments to use IOSA in their safety oversight.”

De Juniac also called for improved government safety oversight, noting that only 22 African states have reached or surpassed the implementation of 60% of the International Civil Aviation Organization’s (ICAO) standards and recommended practices (SARPs) for safety oversight.

“The Abuja declaration committed states to achieve world class safety in Africa. ICAO SARPs are critical global standards. And governments must not fall behind in delivering on important revised Abuja targets such as the establishment of Runway Safety Teams,” said de Juniac.

On intra-Africa connectivity, IATA urged the 22 states that have signed-up for the Yamoussoukro Decision (which opens intra-Africa aviation markets) to follow through on their commitment. And it further urged governments to progress the African Union’s Single Africa Air Transport Market initiative.

de Jubiac said “African economic growth is being constrained by a lack of intra-Africa air connectivity. Opportunities are being lost simply because convenient flight connections are not available. While we cannot undo the past, we should not miss out on a bright future.”

On blocked funds, he has this to say “Airlines experience varying degrees of difficulty repatriating revenues earned in Africa from their operations in Angola, Algeria, Eritrea, Ethiopia, Libya, Mozambique, Nigeria, Sudan and Zimbabwe. “Practical solutions are needed so that airlines can reliably repatriate their revenues. It’s a condition for doing business and providing connectivity,” said de Juniac.

Air Traffic Management
IATA called on African governments to avoid air traffic management re-fragmentation in the face of decisions by Rwanda to leave the Dar-Es-Salamm Flight Information Region (FIR) and South Sudan to leave the Khartoum FIR. “ASENCA, COMESA and the EAC upper airspace initiatives improve the efficiency of air traffic management by working together. I urge Rwanda and South Sudan to reconsider their decisions,” said de Juniac.

IATA also urged industry consultation on air traffic management investment decisions. That will ensure alignment with airline operational needs and avoid over-investment. “Investments must improve safety and efficiency from the user’s perspective. If not, they are just an additional cost burden,” said de Juniac. The ICAO Collaborative Decision Making (CDM) framework is a practical guide for such consultations.

Human Capital
Supporting that growth will need a much expanded labor force. “African Governments need to collaborate with the industry to better understand the industry’s future needs. That will guide the creation of a policy environment to support the development of future talent needed to deliver the benefits of aviation growth,” said de Juniac.

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