GENEVA - Besides issues such as lack of connectivity between countries, astronomical taxes, airport fees and lack of infrastructure, a factor that continues to hamper aviation development in Sub-Saharan Africa is operational cost. One of the aspects that continuously increases the cost of operating an African airline is systemic corruption, particularly at government level.
However, the International Air Transport Association (IATA) says its hands are tied when it comes to dealing with corrupt African states. “Corruption is a pity for Africa, but IATA cannot do everything. The best we can do is to continue to educate the industry on the benefits of eliminating corruption,” said IATA’s director general and CEO Alexandre de Juniac.
During a special round table discussion on African and Middle Eastern airlines yesterday morning at the IATA head office in Geneva, Switzerland, De Juniac admitted there is no “magic solution” for African airlines but continuously emphasised connectivity and operational cost as the major factors hampering the profitability of airlines on the continent.
However, De Juniac hinted at some light at the end of the tunnel for Africa, as he revealed that many of the big issues regarding blocked funds have been resolved on the continent. Airlines operating in some African countries have for years struggled to repatriate funds generated in African markets. Some of the countries where these issues have been resolved include Egypt, Nigeria and Angola. However, Zimbabwe remains a sticking point for airlines operating in that country, as Zimbabwean authorities this week confirmed it is not in a position to allow airlines to take out their hard-earned funds.
Meanwhile, De Juniac stated that IATA continues to invest heavily in training African aviation officials and during 2019 had trained about 3000 people on the continent. “But we cannot do all the training by ourselves. For this reason, we are looking at teaming up with local partners to provide training to the industry like we have done in India and China,” said De Juniac.
IATA has repeatedly called on African governments to abide by international agreements and treaty obligations to enable airlines to repatriate revenues from ticket sales and other activities. According to IATA, the amount of airline funds blocked from repatriation totalled US$4.9 billion at the end of 2017, which was down seven percent compared to year-end 2016.
“The connectivity provided by aviation is vital to economic growth and development. Aviation supports jobs and trade, and helps people to lead better lives. But airlines need to have confidence that they will be able to repatriate their revenues in order to bring these benefits to markets,” De Juniac added.
Recent success in unblocking aviation revenue include US$600 million cleared backlog in Nigeria and over US$500 million in Angola.
Regarding African aviation’s cost competitiveness, airlines continue to be hampered by high costs such as jet fuel, which remains staggeringly high at 35 percent above the global average. In addition, airline user charges make up 11.4 percent of the operating costs of African airlines, which is 100 percent higher than the average for the global industry. This, combined with the “plethora” of taxes and charges of African aviation operators, including some that are found nowhere else, astronomically pushes up the cost of aviation operations on the African continent to the extent that African airlines lose US$1.54 (N$23.10) for every passenger they carry.