In Africa, poor roads, ports, and railway infrastructure often constrain the rapid and efficient transportation of export goods, as well as the movement of passengers. The promise of air transport includes a potential for growth and a role for the economic development of the continent by fostering trade and foreign investments. Though the intra-African market represents less than one percent of the global market, African air traffic—with a potential market of more than 12 percent of the world’s population—is expected to grow at 5.7 percent. But despite strong expected growth and a landmark liberalization agreement, some intra-African markets still lack a true competitive environment.
Prior to gaining independence, most African countries’ air services were based on European relationships and agreements. It was only in the early 1960s, when many former colonies became independent countries, that African states began to negotiate and conclude their own agreements on air services. During that time, most of the newly independent African states also created their own, mostly government-owned, national air carriers, many of which failed.
Most of these African national carriers pursued a business model which consisted of using profitable international routes to and from the territories of their former colonial masters to cross-subsidize their costly yet extensive domestic route network. This often resulted in the maintenance of strict bilateral relationships on intercontinental routes, where capacity was limited and controlled, in order to maximize profitability. The development of regional air services was seen as secondary, especially when a costly domestic network had to be maintained.
Nevertheless, following the international example of the time, intra-African air transport services also became regulated by the traditional framework of bilateral air service agreements (bilaterals). The typical bilaterals of the 1960s were based on the traditional-predetermination model, under which market access and capacity was predetermined. This model controlled the market by effectively restricting competition. But although liberalization of air services has been actively pursued in the U.S. and Europe since the 1970s and 1980s, African air services have remained generally restrictive, costly, and inefficient.
Finding its wings
In the early days of African independence, air transportation was considered essential because the existing road and highway network was broken down into sectors that were distinct from each other. The road network was designed mainly to channel raw materials from the interior to seaports, rather than being part of a network among countries to service regional development.
However, also early on, the promise of African air transport was threatened by dominating carriers from Europe and especially the U.S. This was because the main focus of African carriers in international air transport remained on intercontinental traffic, while the intra-African network remained far less developed.
Gradually, the Economic Commission for Africa, part of the United Nations’ Economic and Social Council, recognized that a new policy was needed to support the development of Africa’s air transport sector. This eventually resulted in the Lagos Plan of Action, which addressed the declining economic environment and the role of the air transport sector in Africa.
This in turn initiated a stronger focus on the development of intra-African air services and measures focused on closer cooperation among African carriers, which later became the core of the Yamoussoukro Declaration. Main tenets included a joint financing mechanism, coordination in scheduling air services, a centralized databank and research program, and the promotion of the creation of sub-regional carriers. But the focus on liberalization gradually degraded. Finally, the much stronger Yamoussoukro Decision was adopted in 1999, and African ministers responsible for civil aviation agreed to liberalize access to air transport markets in Africa.
However, only a few cases have been observed of the exercise of new air traffic rights resulting from the Yamoussoukro Decision. The reasons why range from non-implementation of certain elements of the decision (for example, establishing competition rules, a dispute settlement mechanism, and an operational monitoring body) to simply ignoring it by continuing to agree to traditional restrictive bilaterals.
In retrospect, the stated strategy of cooperation and integration of African carriers was driven more by the need for pan-African cooperation than the need to create a more competitive market environment. Further, the stated objectives and schemes aimed at full integration of the African air transport market (comprising at least 40 of the 53 African states within eight years) was an overly ambitious goal. But despite the overreach and weak likelihood of implementation, the Yamoussoukro Declaration set in motion further initiatives aimed at liberalizing the African air transport market, and generally enforced the notion widely held today: that liberalization for the air transport sector in Africa was inevitable.
Excerpted from Open Skies for Africa: Implementing the Yamoussoukro Decision (World Bank, 2010).