Wednesday, October 21, 2020

Some air space to breathe life into Air Botswana

Botswana is one of the 15 African countries that have unconditionally submitted their acceptance to fully open up its skies by 2017, a move that could potentially see it reverse Air Botswana’s loss-making trend. 

The Secretary General of the African Airlines Association (AFRAA) Dr Elijah Chingosho has applauded Botswana for recognising the far-sighted vision of a Single African Aviation market at the 26th Extraordinary AFCAC meeting that was held last Thursday in Gaborone. 

Chingosho explained that liberalisation of air space, which means flying without any restrictions, could enable consolidation, which means small African airlines could partner to form bigger airlines but still maintain their separate routes. 

What this creates, he said, were economies of scale which the continent currently lacked. Typically African member states have a fleet of six to 12 aircrafts which he said was too small to allow them to compete on a global level. 

The description Chingosho gave of a small scale airline depicted that of Air Botswana, the country’s national airline, which is presently struggling to make profit. The liberalisation process therefore offers Botswana an opportunity to consolidate and absorb a bigger share of the intercontinental traffic. Chingosho cited that the share of intercontinental traffic by Africa was less than 20 percent as it was dominated by very viable airlines. 

Chingosho explained to this publication that the development of aviation moves in tandem with the growth of economies, and Africa currently presented an opportunity to spur its development. The full liberalisation of African skies, he said, could encourage intra-regional trade as well as movement of people within the continent. Specific to Air Botswana, Chingosho identified fuel as is the biggest challenge that the national airline was grappling with. He said that fuel takes the largest share of cost in running an airline. The problem in Africa is that governments taxed fuel heavily as the assumption was that air transport was for rich people. He gave the example that a passenger charge in Africa typically ranges between $40 and $120 whereas the average world-wide ranges between $20 and $40. The high charge in Africa, he said, deterred an ordinary person to fly which was not the case outside Africa. The result of this is loss to African airlines. 

“The situation in Africa is, however, in stark contrast to global trends. According to IATA, African airlines made a record loss of $700 million in 2015, which is expected to be followed by another significant loss of $500 million in 2016,” he said. 

He mentioned that the other 14 countries include South Africa, Zimbabwe, Kenya, Ethiopia, Egypt, Benin, Cape Verde, Gabon, Ghana, Ivory Coast, Nigeria, Republic of Congo, Rwanda and Sierra Leone. He urged the remaining African countries to follow suit so as to accelerate the development of African aviation which he said contributed less than 3 percent of global traffic and also that intercontinental traffic is dominated by non-African carriers. 

Chingosho cited research commissioned by IATA and concluded by InterVistas which examined the impact of liberalised air transport for 12 African countries which include South Africa, Kenya, Ethiopia and Namibia to mention but a few. He said the research found that liberalisation would cause air fares to fall between 25 and 37 percent in the 12 countries hence making air travel more affordable to more people. He quoted statistics from Air Transport Action Group which cite that aviation in Africa supports 6.8 million jobs and more than $7.2 billion in Gross Domestic Product (GDP) across the continent. 

The cause to liberalise the
Africa skies therefore presents the opportunity to increase the number of jobs that the aviation can support and also propel growth of the continent’s economies.

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