African-based airlines must consider merging to create stronger entities that will be able to compete with foreign carriers that command a larger share of the continent’s traffic, if they are to fully benefit from the coming into force of the Single African Air Transport Market (SAATM), discussants at this year’s Routes Africa Conference held in Accra said.
“We expect the states to be committed to the Single African Air Transport Market (SAATM). With this, there will not be restrictions on 3rd and 5th Freedoms, and there will be improvement in connectivity. We anticipate more cooperation and mergers among airlines on the continent,” Ing. Simon Allotey, Director General of the Ghana Civil Aviation Authority (GCAA) said in his submission.
The International Air Transport Association’s (IATA) Vice President for Africa, Mr. Raphael Kuuchi, said the Single Air Market in Africa will give much more opportunity to all operators to service routes they have the capacity. “We anticipate that many more airlines will come together. Coming together will make them stronger.”
Mory Camara, International Business Development Manager, OAG warned that such collaborations ad mergers are crucial if African carriers are to increase their share of intra-Africa and intercontinental traffic to and from the continent. Warning that failure to merge and deepen collaboration between existing carriers will have dire consequences: “If we are not careful, the larger airlines will take advantage of it [SAATM]”
The African Union (AU) in January this year, renewed its quest to liberalise the Africa air space and create the single largest air transport market that will support trade, tourism and lead to significant improvement in the economies of the various countries that sign up.
An initial 23 countries signed up to the single African air transport market (SAATM) when it was officially launched in January and more countries have expressed their preparedness to sign-up to the agreement.
The agreement see the lifting of restrictions on 3rd and 5th freedom rights among participating countries. The Third Freedom Rights will see the granting by one State to another State the right to put down, in the territory of the first State, traffic coming from the home State of the carrier.
Fifth Freedom Rights refer to the right or privilege, in respect of scheduled international air services, granted by one State to another State to put down and to take on, in the territory of the first State, traffic coming from or destined to a third State.
“We hope to see more collaboration between airlines. More airlines need to collaborate. In Ghana for instance, SAA is collaborating with AWA to start direct flights between Accra and London,” Mr. John Attafuah, Managing Director of the GACL said.
David Kajange, the head of the A.U.’s transport and tourism division, projects that the SAATM will lead to about 30 percent drop in airfare.
“With most of Africa’s iconic destinations situated in remote areas, air access is absolutely crucial for tourism on the continent. Reduced rates and an increase in scheduled flights on competent, trusted air carriers that have strong balance sheets will undoubtedly improve second- or third-tier access to countries…” Joss Kent, CEO of AndBeyond said at the launch of the SAATM.