Open Air Access Policy for Connecting Africa, Issues and Challenges

Exploring Africa Hub - Logistics and Transport as Growth DriversExploring Africa Hub - Logistics and Transport as Growth Drivers
1
9 March 2016
Dr Arjoon Suddhoo, FRAeS

Africa – Growth and Opportunities
Air Freedom Rights & Liberalization Policies– From
Chicago Convention (1944) to Yamoussoukro Decision
(1988, 1999)
Some Potential Impacts of Open Air Access Policy in Africa
Why Yamoussoukro Decision has yet to take off?
Open Access v/s Providing Access – Mauritius Case study
Mauritius – Regional Aviation Hub & the National Airline
Air Mauritius – Regional Airline Development Plans
Conclusions
OutlineOutline
2

AFRICA RISINGAFRICA RISING
3
SADC
COMESA
IOC
REUNIONREUNION
Africa
•Second most populous
continent, 1.19 billion
people in 2015
•More than 1 in 5 people
will live in Africa in 2034
•A rising power in the
global economy
One of the world’s most
rapidly growing
economic region
SADC – 15 countries
COMESA – 19 countries
IOC – 5 countries
Total population: 642m
Total GDP: USD 1.244 trillion
Average GDP growth: 5.1%
Eastern and Southern Africa

World GDP Outlook: 2016-2020World GDP Outlook: 2016-2020
4
Sub- Saharan Africa second fastest
growing region for next 5 years
Source: EIU (Feb 2016)
Sub- Saharan Africa second fastest
growing region for next 5 years
Source: EIU (Feb 2016)
North
America
2.062.06
Latin America
2.32.3
Sub-
Saharan
Africa
3.73.7
Asia and
Australasia
3.93.9
Middle
East/North
Africa
3.53.5
Western Europe
1.41.4
Eastern Europe
1.01.0
AfDB: African Development Bank
• Year 2009 – 2015: Africa
growth between 3% - 5.5%
(World Bank)
• AfDB predicts sustained growth
above 5%
o Driving factors:
- Demographic boom
- Urbanisation
- Influx of FDI
- Emergence of African
middle class

Africa Air Passenger and Freight ForecastAfrica Air Passenger and Freight Forecast
5
Source: Boeing Market Outlook 2015-2034
Africa: Granary for the world

Projections for Africa: 2014 - 2034Projections for Africa: 2014 - 2034
6
18,000 new pilots
required by 2034
22,000 new technicians
required by 2034
1,170 new airplanes to meet traffic growth in Africa
by 2034
Source: Boeing Current Market Outlook, 2015 - 2034

Air ConnectivityAir Connectivity
• CONNECTIVITY critical for Africa’s
continued growth and to unlock its full
potential
• Key role of air transport as driver of
Africa’s economic and social
development:
o Facilitates movement of people and
goods
o Connects remote African States,
particularly LLDCs and SIDS
o Catalyst for business, trade,
tourism and cultural exchange
intra-Africa and between Africa
and the world
7
LLDCs: Landlocked Developing Countries
SIDS: Small Island Developing States

(1988, 1999)
Air Mauritius – Regional Airline Development Plans –
Linking Africa to Asia
Conclusions
OutlineOutline
8

10
Basics of the Yamoussoukro Decision (1988,
99), signed by 44 out of 54 African countries;
Liberalization of the air travel through:
1. Speed up the liberalisation of access to air transport markets
in Africa by granting first, second, third, fourth and fifth freedom
with unlimited frequencies and capacity;
2. Put in place regulatory texts;
3. Establish the Executing Agency;
4. Establish the monitoring body;
5. Strengthen safety and security;
6. Fulfill the requirements for the issuance of Air Operator
Certificate

Potential Impacts of Liberalization Policies:

14
1. Existence of visible and invisible barriers with negative impact on
facilitation of air transport (visa, health… );
2. Lack of binding external policy and framework allowing block
negotiation;
3. Impact of foreign policies (unilateral measures) on African airlines;
4. Unfavorable socio-economic and political environment in few
countries;
5. Unnecessary competition due to weak cooperation among African
airlines;
6. Obsolete airport infrastructure and air navigation facilities;
7. Lack of source of funding for fleet renewal, acquisition of
equipment and new technology;
8. Capacity building (training) and brain drain;
9. Insufficient commercial arrangement among African airlines;
http://www.afraa.org/index.php/media-center/publications/conferences/africa-wide-air-transport-conference/486-evaluation-of-the-
implementation-of-the-yamoussoukro-decision/file
Yamoussouko Decision not implemented because:

Issues and ChallengesIssues and Challenges
15
•Safety and security issues
Adopt global safety and security standards
•Internet access, ICT, visa procedures
Eliminate non-physical barriers
•Epidemic outbreak (e.g., Ebola)
Management of epidemics and role of air links
•Economic and political issues (conflicts, …)

16
http://www.steerdaviesgleave.com/sites/default/files/elfinder/India_Campaign/2015.06_India_campaign_Africa_regulation.png
Barriers to African Aviation

(1988, 1999)
Conclusions
OutlineOutline
17

Mauritius Air Access PolicyMauritius Air Access Policy
18
• Government adopts an open but robust air access policy
• A Master Plan for Air Transportation developed in 2004 by consultants
from Netherlands recommended a gradual, step by step approach
towards liberalization (Open sky policy)
• Bilateral air services agreements (BASA) with foreign countries
reviewed with more liberal provisions
 Multiple designation of airlines
 Open routing flexibilities
 Increased capacity/frequency entitlements
 Deregulation of fares
 Codesharing possibilities
 Adoption of EU designation clause - giving EU carriers access to
routes between EU and Mauritius
 Fair competition clause
• Liberal cargo regime (reciprocal)

19
(BASA) with Australia
The Agreement
•The signature of the Agreement creates the necessary framework to promote the
development of air links and exchanges between the two countries. The main
provisions are as follows:
(i) multiple designation of airlines;
(ii) the designated airline(s) of each party will be entitled to operate up to 7
frequencies per week whilst operating services to/from Brisbane, Melbourne, Perth
and Sydney on the Mauritius/Australia route;
(iii) on the specified routes to/from points in Australia other than Brisbane,
Melbourne, Perth and Sydney, the designated airline(s) of each party may determine
the frequency, capacity and aircraft type in operating passenger services and
combination passenger/cargo services; and
(iv) fifth freedom traffic rights.
•At present, Air Mauritius currently operates two to three weekly flights to Perth.
Over and above the direct flights to Perth, it also code shares, as marketing carrier, on
Virgin Australia’s flights, between Perth and the following cities in Australia: Sydney,
Melbourne, Brisbane and Adelaide, since October 2013.

Portfolio of Traffic Rights
EUROPE (17)
Austria Netherlands
Belgium Norway
Czech Rep Russian Fed
Denmark Spain
France Sweden
Germany Switzerland
Iceland UK
Italy Finland
Portugal
ASIA /AUSTRALIA (13)
China Pakistan
Hong Kong Singapore
India Sri Lanka
Indonesia Thailand
Malaysia Australia
Vietnam New Zealand
Maldives
AFRICA (18)
Botswana South Africa
Egypt Swaziland
Ethiopia Tanzania
Kenya Uganda
Malawi Zambia
Mozambique Zimbabwe
Rwanda Nigeria
Madagascar Comoros
Congo Seychelles
MIDDLE EAST
(2)
Saudi Arabia
Dubai
51 BASA/MoU
SOUTH
AMERICA (1)
Brazil

51 BASAs but only 15 Foreign Airlines Serving Mauritius51 BASAs but only 15 Foreign Airlines Serving Mauritius
3 weekly to daily
14 weekly
3 to 5 weekly
2 weekly
2 weekly
1 weekly
3 weekly
3 to 4 weekly
3 to 5 weekly
5 weekly
10 weekly
1 weekly
2 weekly
Minimum 3 daily
2 weekly

Air Access vs. Provision of Air ServicesAir Access vs. Provision of Air Services
• Opening air access does NOT necessarily imply increased air services by
airlines
• Airline operations guided by mainly economic and business factors
• Greater cooperation required between all stakeholders for facilitating provision
of air services
80% BASAs
Unutilised

Opening Access MUST be followed up withOpening Access MUST be followed up with
PROVIDING AccessPROVIDING Access
23
• Pivotal role of national carrier for route development
Air Mauritius first mover on several routes (e.g. China, Kenya, Malaysia)
• Close collaboration between all stakeholders including:
Government, airport authorities, national airline, entrepreneurs, tourism
promotion authorities…
To develop strong national airline and hub (e.g., Singapore, Dubai,
Ethiopia, Qatar, Abu Dhabi)

Government objectives as part of Africa Strategy:
•Mauritius as regional platform for trade, investment and services
•Mauritius as regional aviation hub
•Airport City with wide range of aviation and commercial activities
•Connecting Mauritius and Africa and rest of the world
•Review air access policy
•Promote regional tourism for greater share of African tourists
Mauritius – Government’s visionMauritius – Government’s vision
24

Mauritius Regional Aviation HubMauritius Regional Aviation Hub
• Mauritius geographically well
positioned to emerge as a truly
competitive economic partner for Africa
• Mauritius’ role as regional aviation hub
to connect Sub-Saharan Africa via
Mauritius
• Leverage on the Africa-Asia traffic
potential and bridging the connectivity
gap
• Capitalise on new airport
facilities
25

(1988, 1999)
Conclusions
OutlineOutline
26

Air Mauritius in Figures as at 31 March 2015Air Mauritius in Figures as at 31 March 2015
27
1.37 1.95
million
35,528
10,093
21
55
Codeshare
points
74%
Passenger
Load Factor
€466m
Turnover

Air Mauritius NetworkAir Mauritius Network
28
21 Online Destinations 55 Beyond Codeshare Destinations

Network Expansion through Airline PartnershipsNetwork Expansion through Airline Partnerships
29

Current FleetCurrent Fleet
30
6 A340-300/E
2 A330-200
2 A319-100
2 ATR 72-500
Fleet DevelopmentFleet Development
Air MauritiusAir Mauritius
6 A350-900
Entry into service
•1st
& 2nd
– Second half 2017
•3rd
& 4th
– End 2019
•5th
& 6th
– End 2020
Mid-2016: 3rd
ATR 72-500

From FY 2014/15 to FY 2015/16
Air Mauritius African / Indian Ocean NetworkAir Mauritius African / Indian Ocean Network
980,575
seats
1,028,336*
seats
654,531
pax
712,945*
pax
47,761
more seats
58,414
more pax
GROWTHAFRICA
St. Denis – 3 x daily, St. Pierre – 3 x weekly, RRG - >2 x daily
+ 5%
+ 9%
* Estimated

(1988, 1999)
Air Mauritius – Regional Airline Development Plans –
Linking Africa to Asia
Conclusions
OutlineOutline
32

Lack of Africa-Asia ConnectivityLack of Africa-Asia Connectivity
33

AIR CORRIDOR :AIR CORRIDOR :
BRIDGE BETWEEN AFRICA AND ASIABRIDGE BETWEEN AFRICA AND ASIA
34

Two New African DestinationsTwo New African Destinations
36

The Mauritius / Singapore Air CorridorThe Mauritius / Singapore Air Corridor
Connecting Africa and AsiaConnecting Africa and Asia
37
1. Consolidation of operations on the Mauritius-Singapore route
2. Destinations beyond Singapore such as Thailand, Indonesia,
Malaysia, South Korea, Japan, Australia through commercial
arrangements with partner airlines
3. Travel solutions for the Indian Ocean and Southern and Eastern
Africa to Singapore through Mauritius
4. Potential for Africa-Mauritius-Singapore-Asia routes through the
development of 2 center holidays

The Mauritius / Singapore Air CorridorThe Mauritius / Singapore Air Corridor
Connecting Africa and AsiaConnecting Africa and Asia
38

Setting up of a Regional AirlineSetting up of a Regional Airline
Feasibility Study for creation of regional airline
Subsidiary of Air Mauritius with separate AOC
Target Start-up - 2017
Regional air links expansion: African destinations to increase from 7 to
15 in 2 years with substantial increase in frequency
An additional of 3 A319 in 4 years
Foster Hub Mauritius and grow the Mauritius / Singapore air corridor

(1988, 1999)
Conclusions
OutlineOutline
40

41
CONCLUSIONS
Source:http://www.icao.int/Meetings/wrdss2011/Documents/DevelopmentFo
rum2006/YamousoukroDecision.pdf
a)African Countries need to do more to realize the full potential of the
Yamoussoukro Decision by exploring conditions and forces, which
slowed its implementation.
b) The African Union (AU) as the premier institution to promote and
accelerate socio-economic integration in Africa should provide the
best platform for steering implementation of the Yamoussoukro
Decision and other conditions, which accelerate it.
c)Mauritius continues to open up its air space in a gradual and
controlled manner as prescribed.
d)The Mauritius Regional Airline and the Air Corridor link up East and
Southern Africa to Asia.
e)Opening Access is necessary but not sufficient
f)Mauritius welcomes African Airlines to join the Air Corridor

Open Air Access Policy for Connecting Africa, Issues and Challenges

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