The aviation industry supports $55.8bn of economic activity and 6.2 million jobs in Africa, according to Raphael Kuuchi, special Envoy on Aero-Political Affairs at the International Air Transport Association (IATA).
“While this is impressive, we are only scratching the surface of what aviation can contribute to building Africa’s future,” he said on Monday at a stakeholders’ convention hosted by the African Airlines Association (AFRAA) in Mauritius.
“To enable aviation to be an even bigger driver of prosperity across the continent, we must work together and with governments. We must improve competitiveness; develop effective infrastructure; modernise the regulatory framework with a focus on global standards; and ensure a well-trained and diverse workforce.””
Kuuchi said aviation is still a tough business as the airlines in Africa, on average, lose $1.55 (about R22) for every passenger carried.
He explained that there are many reasons for the poor performance of African airlines. Africa is an expensive place for airlines to do business. Jet fuel costs are 35% higher than the rest of the world; aircraft departure fees are 30% above the global average; and taxes and fees are among the highest in the world.
“Too many African governments tax aviation as a luxury rather than a necessity. We must change that perception. The value of aviation for governments is not in the tax receipts that can be squeezed from it. It is in the economic growth and job creation that aviation supports,” said Kuuchi.
Another important element of competitiveness for airlines is the ability to reliably repatriate earnings—in line with international treaty obligations.
The African countries blocking over $1.0bn of airline funds are, therefore, a big concern for him.
“Many of these countries are facing severe economic challenges but blocking airline funds puts connectivity at risk. And that invites even broader economic problems,” cautioned Kuuchi.
“It is in everybody’s interest to ensure that airlines are paid on-time, at fair exchange rates and in full. And when problems are on the horizon, urgent dialogue is the first step.”
As for infrastructure, sufficient runways, terminals, airspace capacity to meet demand, technical and commercial service quality aligned with airline needs and affordability are what largely lacks in Africa, in his view.
IATA is putting a resolution into practice in some countries where governments are considering a private-public partnership in the future development of airports to provide guidance to the governments, including the economic regulation that will be needed to make them a success for all stakeholders and provide the connectivity that the countries need to develop.
IATA has also been promoting the concept of smarter regulation, aiming to solve real problems through dialogue and partnership between the industry and governments.
Kuuchi further pointed out that the low density of the African intra-continental network makes it impossible to realise the potential benefits of a connected African economy. Currently, intra-African travel is 45% more expensive than world averages.