Ways to reduce air travel costs in East Africa
Industry players have suggested how the prohibitive air fares in East Africa can be lowered.
These have to include total unification of air transport service or deliberate preference to local airlines registered rather than the international carriers.
A single air transport services agreement binding all seven East African Community (EAC) partner states is seen as a solution to the exorbitant costs and related challenges.
“It will lower the cost of air tickets for both passengers and cargo in the region,” said the East African Business Council (EABC) executive director, John Bosco Kalisa.
He made the appeal on Wednesday during a validation webinar for the recently concluded study on air transport services Liberalisation in the EAC bloc.
He challenged the EAC partner states to give “favourable treatment” to the EAC airlines in order to lower the fares through proximity and economies of scale.
The study commissioned by EABC, an apex body of private sector associations in the region, aimed to seek ways to bring down air transport fares in the region.
Also incorporated in the study is TradeMark East Africa (TMEA), an organization funded by a range of development agencies with the aim of growing prosperity in East Africa through trade.
Mr Kalisa regretted that foreign airlines that connect to the region often enjoyed more “favourable treatment” than EAC airlines. “The region can start offering preferential and national treatment to EAC cargo planes to boost exports,” he pointed out.
Mr Kalisa further called on the EAC bloc to consider replacing the existing Bilateral Air Services Agreements (BASAs) with a single air transport services agreement “so as to lower the cost of air transport in the region.”
The study proposed a raft of proposals to lower the cost of air transport in the EAC through a review of the current taxes, levies, and related charges.
Limited liberalisation of air transport contributes to high flight ticket rates, and visa restrictions limit the movement of non-residents into the EAC region.
Other factors impacting the aviation sector in the region are limited infrastructure and a lack of standardized regulations.
Despite the challenges, air transport costs were described as an enabler of tourism and exports of horticulture, which are among the leading sectors in foreign exchange earnings for the EAC.
Charles Omusana, the principal economist with the EAC secretariat, said liberalisation of air transport services will contribute “to our greatest desire of growing intra-EAC trade.”
The preliminary findings also reveal cargo volumes have largely stagnated in the EAC region due to the high cost of air cargo and the lengthy bureaucracy involved in obtaining clearance.
This has led to some airlines’ scheduling delays and inadequate infrastructure at the EA airports, like cold rooms and route restrictions, making it difficult to access new markets.
The webinar expounded that the EAC partner states should fast-track the finalization and implementation of EAC regulations on the liberalization of air transport services in line with the EAC Common Market Protocol.
The preliminary findings of the study on air transport liberalization in the EAC show a percentage increase in passenger traffic leads to a 0.166 percent increase in tourism receipts.
Similarly, a percentage increase in freight carrier departures leads to a 0.299 percent increase in tourism receipts.
At the same time, preliminary findings of the study show the percentage increase in air passenger traffic leads to a 0.05 percent increase in Gross Domestic Product (GDP).
This is achieved through an increase in trade, tourism, inbound investment, production, and employment.
In the meantime, air transport liberalisation in the EAC countries could result in an additional 46,320 jobs and $ 202.1 Million per annum in GDP.
Skyrocketing air transport costs have been a matter of concern in the EAC bloc for years.
The EABC has agitated countless times for a review of aviation taxes, levies, and charges so as to make the mode of transport affordable.
High air transport costs in the EAC are blamed for frustrating aviation-dependent sectors such as tourism and the export of fresh produce.
At the regional level, the domestic air transport sector remains protected in contravention of the EAC Common Market Protocol.
The air transport market in the EAC was also still under what is described as “tight regulation and control” by the governments.
This is believed to have denied fair competition among the operators within the bloc, now with seven partner states.
Expensive air tickets in the EAC have emerged at the plenary sittings of the East African Legislative Assembly (Eala).