By Chaitan Jai, former Assistant Director External Affairs, IATA
Aviation’s ability to contribute to social and economic development is clear. In 2016, the industry supported nearly 66 million jobs and US$2.7 trillion dollars of economic activity. In the next 20 years, those figures could rise to 98 million jobs and US$5.7 trillion of economic activity.
In Africa, aviation supports 6.2 million jobs and US$55.8 billion in GDP. It sends African goods and its people out into the world, and brings in economic investment, tourism, trade and aid.
Without aviation, Africa would be a more fractured and constrained continent; with aviation, it can better realize its ideals of regional integration, peace and prosperity. IATA’s 20-year passenger forecast shows plainly that Africa is set for a strong expansion in air connectivity.
We expect passenger growth to average 4.6% per year over the next 20 years. By 2037 it could see an extra 199 million passengers, for a total market of 334 million passengers.
But such growth is not guaranteed. A 1% drop in aviation’s growth rate will lead to an 8% decrease in jobs generated by aviation and a 17% drop in economic activity supported by air transport.
With so much on the line, how can we ensure that aviation meets its potential in Africa and helps support the continent’s development, growth and prosperity?
One important way is through the wider adoption of smarter regulation initiatives. Many countries around the world have adopted smarter or better regulation principles, which seek to deliver clearly defined, measurable policy objectives in the least burdensome way.
A policy framework which incorporates these principles positions a country, or a region, for sustainable aviation growth. Smarter regulation means solving problems by respecting global standards, consulting affected parties and understanding the impact of potential solutions so that unintended consequences are avoided.
For example, following ICAO guidance on user charges and taxation would address a significant cost burden on African airlines, while at the same time ensuring that infrastructure is fit-for-purpose and can accommodate the significant growth expected.
ICAO calls for consultation, transparency, cost-relatedness and non-discrimination in this area. But many user charges are imposed without consultation or on infrastructure that doesn’t correspond to user needs in the first place. As a result, user charges in Africa are about 35% higher than the global industry average, making flying more expensive not only for airlines, but for price-sensitive consumers too.
ICAO has recently recognized the importance of good regulatory practices in its ICAO Policy Document 9626, incorporating principles on smarter regulation into its Manual on the Regulation of Air Transport.
Some examples include:
- Consistency & Coherence
Newly developed policies or changes with respect to regulations should be consistent with existing rules and practices so that there are no overlaps and contradictions;
- Impact Assessment
There should be an assessment of the impacts from the regulation prior to implementation; and the on-going impacts should be regularly monitored; implementation; and the on-going impacts should be regularly monitored;
The development of the regulation should involve those who are potentially affected -with the minimum requirement being consultations; the decision making process should be transparent and objective.
Using these principles to formulate African aviation policy is key to realizing the promise of SAATM, the Single African Air Transport Market.
Without cost-effective infrastructure that can accommodate growth, taxes and charges policies that do not restrict growth, and balanced consumer protection and air transport policies that can facilitate growth, SAATM’s potential will go unrealized.
IATA is pleased to be partnering with the African Union, the African Civil Aviation Commission, the African Airlines’ Association and the African Development Bank to ensure the regulatory framework which underpins SAATM reflects the ICAO guidance.
The AU has incorporated these smarter regulation principles into its Guidelines for the implementation of the African Civil Aviation Policy and SAATM.
Aviation has the potential to open up new markets, bring in new ideas and technologies, create jobs and lift people out of poverty. IATA stands ready to contribute to realizing this uniquely African promise.