Africa: Taking Its Place as a World Aviation Leader
Good morning. I am delighted to be in Kenya, which has always been one of the most important hubs for aviation in Africa. Thanks to aviation, Kenya is well connected to the world, and its economy and society is an open one. Perhaps that is why terrorists seek to attack this wonderful country—and it is also why they will ultimately fail in their aims. Terrorism is a global problem and requires concerted global cooperation to overcome it. IATA and the whole aviation community express our condolences to the Kenyan people for all they have endured at the hands of such evil. We pledge to play our full role in helping to ensure aviation cannot aid and abet such acts.
Africa and aviation
The great continent of Africa covers more than 30 million kilometers. It is home to more than a billion people. It is host to some of the most diverse and challenging terrain anywhere to be found. And in between its growing cities lie some of the most remote and inaccessible communities on earth. It is air transport that binds this incredible land together. Aviation is the lifeblood of Africa, supporting 6.9 million jobs and $80 billion in GDP. It sends African goods and its people out into the world, and brings in economic investment, tourism, trade and aid. Without aviation, Africa would be a more fractured and constrained continent; with aviation, it can better realize its ideals of regional integration, peace and prosperity.
But Africa’s aviation network is not without considerable challenges and troubles. We can celebrate the contribution of air transport to African development, but must not shirk from tough decisions to improve it. You will all have heard before the familiar litany of issues: ill-conceived regulation, poor safety oversight, inadequate and costly infrastructure, and restrictive air-service agreements. In particular, the high cost to airlines doing business in Africa is a major impediment. Taxes and charges on infrastructure and fuel are much higher than the global average, and must be reduced. These issues, and more, are pressing concerns and must be addressed by governments, because a strong aviation system is the key to resolving many of Africa’s deepest problems in health, education, and economic development.
My aim today, however, is not merely to remind us of these issues, but to put them in a new context: a context in which Africa becomes a thriving center of aviation, even leading other regions by its example. The nations of Africa have a unique opportunity not only to strengthen air transport, but to surpass many other traditional aviation powers, who through neglect and poor strategic thinking have failed to maximize the potential air connectivity offers.
Let us start with the issue of smarter regulation. Africa is fortunate that it has a chance to learn from the mistakes of others, particularly the EU and the US which have examples of the worst legislation in this area. This lesson can be learned by developing smarter regulation using best practice principles such as full consultation, consideration of unintended consequences, and a proportional approach. Unfortunately there are some examples where African States have not been following smarter regulation principles. One is the response to Ebola, where the World Health Organization (WHO) guidelines were not adhered to. Despite the WHO’s call that closing borders and adding restrictions was unhelpful, some African States did just that. Fortunately, I think some good lessons have been learned and that were a similar situation to develop, States would be more aligned with the WHO’s consistent global approach.
A second example comes from South Africa, where we have seen a dismaying lack of consultation with industry over the new immigration regulations which require unabridged birth certificates for children travelling by air and also for all travelers requiring visas to apply in person. These obstacles are already deterring would-be visitors. The industry sincerely wants to work with the South African government to help it achieve its laudable anti-child trafficking objectives. But we warned that the proposal was going to create a problem, and so it has proved. There are some encouraging signs, however, that the government is prepared to review and possibly re-craft the regulations.
Smarter regulation also needs to be applied in a local context, where it can have the greatest effect.
Take safety for instance. Safety must always be our first priority, and smarter regulation offers an opportunity for Africa to show what can be achieved in terms of safety improvement. Let’s look at the numbers. The all-accident rate for the region last year was 11.18 for every one million flights. But in fact, last year Africa had a jet hull-loss rate of zero, better than the global average. One good year in isolation? Perhaps, but nothing in safety happens by accident. The 2014 result was a culmination of a number of initiatives set down by governments in their efforts to meet the Abuja Declaration objectives. This momentum needs to continue and solidify. Only 14 out of 54 African states comply with 60% or more International Civil Aviation Organization (ICAO) Standards and Recommended Practices, or SARPS. We would like to see national civil aviation authorities (CAAs) given greater resources and operational independence.
We are working with a number of airlines to bring them onto the IATA Operational Safety Audit (IOSA) registry, to join the 27 airlines from sub-Saharan Africa which already benefit from this rigorous safety audit. For those airlines not eligible for IOSA, we have created the IATA Standard Safety Assessment (ISSA), giving even the smallest carrier the opportunity to benchmark its safety performance. Our team will be sharing more on this later on, and please note that this Thursday we will officially unveil ISSA in a workshop here in Nairobi.
With Government commitment, the adoption of global best practices, and the continued vigilance and excellence of Africa’s aviation professionals, I see no reason why Africa cannot soon match the levels of safety enjoyed in other regions of the world: and once that’s been done, to keep making even more progress.
The problem of traffic rights restrictions within Africa has been an issue for many years. The Yamoussoukro Decision (YD) can be traced back to the 1990s. It committed its 44 signatory countries to deregulating air services and to opening regional air markets to transnational competition. As we know, the implementation of this agreement has been slow, and the benefits have not been realized. To quantify some of those benefits, we recently commissioned independent economists to research the impact of applying the Decision to 12 key markets across Africa. The results were startling: intra- African liberalization between these 12 markets would provide an extra 155,000 jobs and $1.3 billion in annual GDP. A potential five million extra passengers a year would have the chance to travel.
And the good news is that there are both established and new-entrant carriers ready to service this demand. Fast Jet is building a multi-national brand presence. Sub-Saharan Africa now has three major hubs in Ethiopia, Johannesburg and here in Nairobi, and their home carriers are strong brands. Some have argued that opening up Africa’s skies will weaken African airlines, but I believe more traffic and more services opens up greater opportunities. Certainly, many African airlines are not thriving in the current climate. Our June profit forecast for the industry calculated African airlines would make a collective profit of $100 million this year, for a margin of only 0.8%, the lowest of any region of the world.
The logic for opening Africa’s skies is inescapable, and it is very encouraging to see the States of the African Union commit themselves to implementing Yamoussoukro by 2017. We commend the 11 States that have signed up to full implementation of the YD since January 2015 and urge other States to follow suit for their benefit and the overall benefit of Africa.
Two other important pieces of regulation which we need African States to adopt without delay are the Montreal Convention 1999 (MC99) and the Montreal Protocol 2014 (MP14). They are both excellent examples of the common framework and global consistency elements of smarter regulation. MC99 establishes a standard approach to airline liability, delivering benefits to all stakeholders without creating a regulatory burden. It provides better protection and compensation to passengers, and it provides the legal framework for digital invoicing, meaning faster shipments for time-sensitive goods—something particularly important for Africa’s perishable export industry. It is reassuring to see that the majority of nations recently ratifying MC99 have come from Africa. A number of African States, however, such as Algeria, Angola, Ghana, Mauritius, Senegal and Uganda, are yet to ratify, and we hope they will do so soon.
MP14 is an example of strong leadership from African States in developing effective global regulations. MP14 amends the 50-year-old Tokyo Convention on unruly passengers. Together with the initiatives already undertaken by airlines to prevent and manage unruly passengers, this important international law will act as a deterrent, giving States the legal powers they need to take action. African nations have been at the forefront, comprising 16 of the 28 States to sign it, and with Congo being the first in the world to ratify. We look forward to more African States ratifying MP14 and continuing to demonstrate leadership on this issue.
Finally, I would also urge States to implement the World Trade Organization Trade Facilitation Agreement. This Agreement promises enormous potential for countries to reduce transport costs by up to 10% through more efficient facilitation, making them more competitive in the global economy.
Infrastructure is a challenge in Africa. Investment is certainly needed to create the right facilities to ensure the expected growth in passenger numbers can be accommodated. And I am pleased to note that after many years of under-investment, the Kenyan government has commissioned two new terminals to bring the overall capacity of Jomo Kenyatta International Airport to 7.5 million passengers a year. In addition, there are plans to build a greenfield Terminal by 2018 to cater for up to 20 million passengers.
Such developments are welcome, but we must be careful, for over-investment will cripple the industry with a cost burden that will weigh down air connectivity. ICAO has very clear guidelines on infrastructure funding—and Africa has an opportunity to be a leader in this field. Very few parts of the world get this balance right. IATA has recently signed an MOU with the Mexican government to work together on the development of a new hub airport for Mexico City, and I hope that other States will follow the example by working closely with the industry, not just for new infrastructure, but for making the best use of existing facilities. No one knows better than an airline the level of air navigation and airport charges that enable a route to be viable, and the kind of amenities they need to support their passengers and aircraft efficiently. If African governments were to take the lead in genuinely consulting the users of the infrastructure before it gets funded, built or operated, they would soon find themselves with the right mix of facilities, growing lock-step with demand, providing the right level of world-class quality, at the right price to maximize growth. Few, if any, regions would be able to boast of a comparable achievement.
Finally, a word on the environment. The industry is committed to meeting its carbon emissions targets. In particular, our goal of carbon-neutral growth from 2020 is of utmost priority. Airlines are making great strides with the adoption of new aircraft, more efficient operations, and better use of infrastructure. It is the adoption of a global market-based mechanism, however, that will be the most important piece in the jigsaw. A Global Market Based Measure (MBM) can only be agreed by governments, working at ICAO. We are in a crucial period ahead of next year’s Triennial Assembly, where a proposal for a Global MBM to be implemented by 2020 must be agreed. I urge everyone in this room to back these negotiations and ask your governments to commit to a workable solution. For their part, airlines have already suggested a global offsetting scheme would be the most effective way forward.
I also want to talk about another environmental issue, especially relevant to Africa. The illegal trade in endangered animals and plants trafficked by air is increasing. At the IATA AGM earlier this month, I signed an MOU with CITES, the UN body responsible for the safe transit of wildlife. We will be working together to put an end to this trade. Africa is home to many of the world’s most precious and endangered animals. It is my hope that together, we can play our part in ensuring this amazing biological inheritance is not lost.
For too long, Africa’s aviation potential has been overlooked. But the reality is that Africa is a coming economic power in the world. Two decades ago, Africa’s market had the same potential as China’s. Since then China has leaped far ahead. But Africa still has that potential—and it must be developed correctly. Smarter regulation, and a focus on delivering the safety and connectivity commitments of the African Union (AU), will be crucial to establishing Africa as a global aviation powerhouse.
As we move forward with this vital agenda for African aviation, it is critical we retain and build strong partnerships. I am delighted that IATA has forged close relationships with governments and important institutions such as the AU, and the African Development Bank. I welcome the cooperation we have established between the representative organizations of aviation across Africa, particularly African Civil Aviation Commission (AFCAC), African Airlines Association (AFRAA), and Airlines Association of Southern Africa (AASA). The transformative power of placing aviation at the heart of a nation’s economic strategy is a proven fact. When placed at the heart of an entire continent, aviation can drive an economic revolution. I regard it as a privilege to be a witness to Africa’s aviation revolution taking flight.
Thank you very much.