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The Spirit of Freedom

Special Report - Southern Africa

Liberalization in Southern Africa is a reality. But what progress there is—such as Air Namibia’s recently announced flights from Johannesburg to Accra and Lusaka, with rights to pick up an unlimited number of passengers and cargo—has been hard fought

African liberalization was previously centered on the Yamoussoukro Decision (YD). This has its legal origins in the Abuja Treaty, which created the African Economic Community. Forty-four African states ratified the treaty, and consequently became parties to the Decision (which itself is simply the implementation mechanism of the earlier Yamoussoukro Declaration). South Africa isn’t a party to YD, neither is Madagascar, Swaziland or seven other states. But this isn’t a problem, as the YD has effectively stalled.

Liberalization hopes now rest in bilateral agreements and regional initiatives. The Southern African Development Community (SADC) calls for Member States to develop a harmonized regional aviation policy, which includes the “gradual liberalization of intra-regional air transport markets for the SADC airlines.”

Dr Charles Schlumberger, Principal Air Transport Analyst at the World Bank, says the Yamoussoukro Decision is still alive, but only because of willingness on the part of certain countries. “The Yamoussoukro Decision is happening, but on a bilateral basis,” he asserts. “Some bilaterals have the spirit and scope of Yamoussoukro, even if it is not YD in actuality.”

Manoj R K Ujoodha, CEO of Air Mauritius, provides an example. “Our authorities have already initiated the process of air transport liberalization on a bilateral basis to provide for more entrants and competition,” he says. “Air Mauritius supports this level playing field for liberalization and market access. 

“As for the Yamoussoukro Decision, our authorities have decided to opt out,” he continues. “Mauritius is an end of the line destination and Air Mauritius would be exposed to the siphoning off of the main markets it has developed over time by more sixth freedom carriers.”

Dominant carriers

In southern Africa, the main challenge to liberalization seems to be the fear of South African carriers dominating, and soon eliminating, less viable air carriers. The country’s airlines represented 68% of the region’s aircraft in 1997, and by 2007 this percentage had grown to over 80%.

However, Schlumberger notes the argument can be countered by the fact that the South African domestic market has prospered since the 1990 introduction of a true competitive environment:

  • The entry of a low cost carrier serving the Eastern Cape region in 2004 resulted in an increase by 52% of overall passengers, with 13% more tourists visiting the region.
  • In 2006, Zambezi began competing with SAA on the Johannesburg-Lusaka route. Air fares dropped by around 35% and there was a 38% increase in passengers. It is estimated that the increase translates to an additional 6,300 tourist arrivals in Zambia, resulting in $8.9 million in additional income.

In neighboring Mozambique, air fares are kept artificially high by protecting the national carrier. The country has enormous tourism potential, including over 2,500 km of undeveloped coastline with white beaches and many national parks, game reserves and hunting areas. Nevertheless, surveys suggest international tourists prefer cheaper vacation packages in South Africa.

“Furthering freedom in intra-African skies will take more liberal bilateral agreements as well as regional and sub-regional initiatives,” says Lance Brogden, IATA Regional Vice President for Africa. “It will be up to the African Union to coordinate this on a pan-continental basis as the Yamoussoukro Decision seems to be moving far too slowly.”

 

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