FINAL REPORT - Common Market for Eastern and Southern...
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i FINAL REPORT A STUDY TO DETERMINE THE LEVEL OF IMPLEMENTATION OF THE LEGAL NOTICE NO 2 OF 1999, ON THE COMMON MARKET FOR EASTERN AND SOUTHERN AFRICA (COMESA) AIR TRANSPORT LIBERALIZATION PROGRAM FUNDED UNDER THE REGIONAL INTEGRATION SUPPORT PROGRAMME By Julius Barare Okara August, 2013 Nairobi, Kenya
Transcript of FINAL REPORT - Common Market for Eastern and Southern...
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FINAL REPORT
A STUDY TO DETERMINE THE LEVEL OF IMPLEMENTATION OF THE LEGAL NOTICE NO 2 OF 1999, ON THE COMMON MARKET FOR EASTERN AND SOUTHERN AFRICA (COMESA) AIR TRANSPORT LIBERALIZATION PROGRAM FUNDED UNDER THE REGIONAL INTEGRATION SUPPORT PROGRAMME
By
Julius Barare Okara August, 2013
Nairobi, Kenya
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Preface
This is the final report on the study to determine the level of implementation of the Legal Notice no 2 of 1999, on the Common Market for Eastern and Southern Africa (COMESA) air transport liberalization program. The report is divided into 7 chapters. Chapter one is the Executive Summary, chapter two the Overview and chapter three the findings. Chapter four are the general, salient and pertinent observations, and chapter five are the recommendations. Chapter six is the recommendations implementation matrix and chapter Seven are the conclusions. The last section consists of the annexes and appendices.
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Acronyms, Codes & Definitions ACC Accra JKIA Jomo Kenyatta International Airport ASECNA Agency for Aerial Navigation Safety in
Africa and Madagascar JNB Johannesburg
ADD Addis Ababa JRO Kilimanjaro Airport AFCAC Africa Civil Aviation Commission KLM KLM Royal Dutch Airlines AFRAA African Airlines Association KQ Kenya Airways ASA Air Service Agreement KRT Khartoum ATRB Air Transport Regulatory Board BASA Bilateral Air Service Agreement LLW Lilongwe BLZ Blantyre LUN Lusaka CAA Civil Aviation Authority MS Egypt Air CAAZ Civil Aviation Authority of Zimbabwe NBO Nairobi COMESA Common Market for Eastern and
Southern Africa PW Precision Air
COSCAP Cooperative Arrangement for Operational Safety and Continued Airworthiness Programme
QM Air Malawi
REC Regional Economic Community DCA Department of Civil Aviation SA South Africa Airways DECISION SADC Southern Africa Development
Community EAC East African Community SD Sudan Airways ECA Economic Commission for Africa ToR Terms of Reference EU European Union UM Air Zimbabwe ET Ethiopian Airways UNECA United Nations Economic Commission
for Africa IATA International Air Transport Association YD Yamoussoukro Decision IOSA IATA Operational Safety Audit
Programme
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Table of Contents Preface .............................................................................................................................ii Acronyms, Codes & Definitions ....................................................................................... iii Table of Contents ............................................................................................................iv Chapter 1 ........................................................................................................................ 1
1.0 Abstract ................................................................................................................................. 1 1.1 Executive Summary .............................................................................................................. 1
Chapter 2 ........................................................................................................................ 4 2.0 Overview ............................................................................................................................... 4 2.1 Introduction ........................................................................................................................... 7 2.2 Background and Context....................................................................................................... 8
2.2.1 The African Scene.......................................................................................................... 8 2.2.2 The global Scene .......................................................................................................... 12 2.2.3 The Study objective ..................................................................................................... 12 2.2.4 Methodology and Approach ........................................................................................ 13 2.2.5 The missing "S" Concept ............................................................................................. 13 2.2.6 Pan-African Youth Movement for Africa’s Renaissance and the Liberalization of Air Transport Services in Africa ................................................................................................. 14 2.2.7 The Single African Airspace ........................................................................................ 16 2.2.8 The SAS – Eldrow Resources ...................................................................................... 16 2.2.9 DORS Inc. Consultants- CNS / ATM Systems Study ................................................. 16 2.2.10 ASECNA / UNESCO - CNS / ATM Contract........................................................... 16 2.2.11 African Common Civil Aviation Policy (AFCAP) .................................................... 16 2.2.12 AUC Strategic Plans .................................................................................................. 17
Chapter 3 ...................................................................................................................... 18 3.0 Findings............................................................................................................................... 18
Chapter 4 ...................................................................................................................... 34 4.0 General, Pertinent and Salient Observations ...................................................................... 34 4.1 Achievements and Shortcomings ........................................................................................ 34
Chapter 5 ...................................................................................................................... 37 5.0 Recommendations and Implementation Matrix ................................................................ 37 5.1 Recommendations ............................................................................................................. 37
Chapter 6 ...................................................................................................................... 38 6.0 Implementation Matrix ....................................................................................................... 38 6.1 The Recommendation Implementation Matrix ................................................................... 38
Chapter 7 ...................................................................................................................... 39 7.0 Conclusions ..................................................................................................................... 39 7.1 Annexes and Reference documents .................................................................................... 41 7.1.1 Annexes............................................................................................................................ 41
7.1.1.1 The AFRAA Annual Report 2012. ........................................................................... 41 7.1.1.2 Report by SAFRO - Collect Consortium on YD implementation. ........................... 41 7.1.1.3 COMESA Legal Notice no 2 of 1999. ...................................................................... 41 7.1.1.4 The Yamoussoukro Decision. ................................................................................... 41 7.1.1.5 The questionnaires that were used in Data Collection .............................................. 41
7.1.2 Reference Documents and Materials ............................................................................... 46
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Chapter 1
1.0 Abstract The liberalisation of air transport services in COMESA and Africa had three (3) main objectives;
• To facilitate the integration of Africa in conformity with the Abuja Treaty of 1994, within the framework of the 6-stage implementation timelines
• To build and strengthen the African Air Transport industry. • As part of the global trade liberalisation agenda
The YD/COMESA air transport services liberalisation programmes were instruments or strategies created and promulgated by the OAU/AU, the COMESA Policy Organs, and Decision Makers for the actualisation of these three (3) objectives. The expected outcomes were;
• The establishment of a single African air transport services market • Creation of a single African airspace; first, within COMESA, and then scaled up
to include the whole of Africa. This study determines the level of implementation of the Legal Notice No.2 of 1999, on the Common Market for Eastern and Southern Africa (COMESA) Air Transport Liberalisation Program, and the extent to which these three objectives have been realised if all. 1.1 Executive Summary This document is the final report of the study to determine the level of implementation of the Legal Notice No 2 of 1999, on the Common Market for Eastern and Southern Africa (COMESA) Air Transport Liberalization Program. This study has been undertaken in accordance with the Terms of Reference agreed between the consultant and the COMESA Secretariat. The report consists of an executive summary, an overview, introduction, context and historical background, methodology, findings, recommendations, a recommendations implementation matrix and conclusions.
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The following is a summary of the key findings;
1. All COMESA member states prefer to use the current BASA format as the modus operandi in exchanging air traffic rights between themselves. They regard both the YD and COMESA Legal No 2 of 1999 as useful reference and background material during the negotiations but are not treated as the primary documents for negotiations.
2. Therefore, for purposes of exchanging traffic rights, COMESA member states have no extra privileges over non-members, solely on the basis of being member states of COMESA.
3. Some COMESA member states have signed Open Skies Agreements with non
COMESA member states, a privilege not extended to COMESA members, even on request.
4. The establishment of a single COMESA internal air transport services market
remain elusive ten (10) years, after it was expected to be operational, on August, 12, 2002.
5. The establishment of a single COMESA airspace, which is a prerequisite to the
establishment of the single air transport services market, also remain equally elusive.
6. The COMESA private sector air operators regard and expect the intra- COMESA
air transport market liberalization to be market, rather than regional integration driven.
7. The Abuja Treaty 6- stage framework, road map, and implementation timelines is
rarely used as the primary yardstick, in evaluating progress of the implementation of the COMESA Legal Notice and the YD.
8. The Tripartite Arrangement as a second pole of integration may accelerate the
establishment of both the single air transport market and single airspace first, within the 27 member states of EAC, COMESA and SADC, and then, the AU.
9. The growing middle class especially within the 8 Sub-Sahara states such as
Kenya, Uganda, Ethiopia, Nigeria, South Africa, Zambia, Senegal, Angola and Ghana who together account for more than 75% of the region's GDP, have the potential to create demand for intra- Africa air transport services, which will spur growth in the industry if, the constrains which have been identified and highlighted by AFRAA in their 2012 Annual Report are fixed.
10. Over 90% of commercial air transport by COMESA Airlines is carried out by
Egypt, Kenya, Ethiopia, and Mauritius.
11. The AU vision of a strong and united Africa through integration is, in many cases, misaligned with that of its executing agencies, and tends to complicate the implementation of decisions of policy organs.
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12. The access to and use of the African airspace by the military of non - AU
(COMESA) member states tend to complicate the establishment of a single African airspace.
Finally the report makes the following recommendations, and, proposes an implementation matrix, with clear timelines and responsibilities as indicated below:
1. Establish the COMESA single air transport services market;
2. Establish the COMESA single airspace;
3. Harmonize the work being undertaken by IGAD on the liberalization of air transport services with that of the AUC and the Tripartite, as regards the implementation of the YD and the COMESA legal notice;
4. Organize a joint Tripartite meeting for Ministers responsible for civil aviation to
approve 1 and 2 above and to authorize, give specific instructions, mandates and timelines, to relevant organs within the tripartite and the AU arrangement to complete the process of their implementation within the set timelines;
5. Strengthen and operationalize the Tripartite as the second pole and or platform
for the implementation of both YD and COMESA legal notice;
6. Expedite the operationalization of the JCA;
7. Harmonize the work of the Tripartite on the implementation of the YD and COMESA Legal Notice with that of the AUC;
8. Set up an accurate and reliable air transport statistics observatory;
9. Revisit, review and reconsider the wisdom of the continued push to comply and
implement the YD and the Legal Notice in their current formulation, and, instead refocus on and popularize the establishment of the single air transport services market and the single air space and;
10. Re-evaluate the notion of ownership, effective control and the right of
establishment regimes in Africa and COMESA in the context of implementing the YD and COMESA Legal notice;
11. Formulate a white paper or policy document on the establishment of both a
single African air transport services market and a single African airspace, in conformity to the Abuja Treaty and the African Common Civil Aviation Policy.
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Chapter 2
2.0 Overview The Liberalization of air transport services, through the promulgation of the Yamoussoukro Decision and the COMESA Legal Notice, was a decision of the top policy organs of the OAU / AU and COMESA respectively, and is part of Africa's regional integration agenda, within the framework of the 6 - stage implementation timelines. The First Meeting of the COMESA CAAs, as directed by the COMESA ministers responsible for Civil Aviation was held from Nov 6-7 1998, in Lusaka Zambia, to start the process of implementing the liberalisation of air transport services within COMESA as part of the operationalization of the COMESA FTA by 2000. In May 1999, the COMESA Council Ministers adopted the recommendation of the first meetings of the COMESA CAA/AA, and promulgated the COMESA Legal Notice No 2 of 1999. The meeting of African Ministers responsible for Civil Aviation convened for that purpose at Yamoussoukro in Nov 1999 adopted and used the COMESA legal notice to amend and modify the Yamoussoukro Declaration of 1988 into the Yamoussoukro Decision of 1999. The Yamoussoukro Decision was a Decision to implement the Yamoussoukro Declaration of 1988. This decision was a strategy for implementing the Abuja Treaty. The promulgation of the Yamoussoukro Decision was informed and influenced by the following three factors or forces: Africa's own decision and initiative to use the liberalisation of air transport
services as one of the tools of implementing regional integration within the framework of the Abuja Treaty.
A global trend to liberalise trade including trade in air transport services led by
the USA. The general belief and perceived consensus, that, deregulation and global trade
liberalization, was good for world trade and the global economy. The COMESA Air Transport Liberalization program is a component part of the many programs planned under the African Regional Integration agenda, to be carried in six (6) stages, starting in 1994, and, ending in 2034, in conformity with timelines set out in the Abuja Treaty.
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It is important to repeat and make reference to these six (6) stage implementation timelines as set here below:
To underscore the centrality of the above AEC 6 stage implementation matrix, the 18th ordinary session of the Assembly of the Union sitting in Addis Ababa, Ethiopia from 29-30 January 2013 decided as follows:
1. Creation of regional blocks (RECs) in regions where such do not exist to be
completed by 1999.
2. Strengthening of intra - Africa RECs , RECs integration , and intra- RECs harmonization of RECs to be completed by 2007
3. Establishing of Free Trade Areas ( FTAs) , and Customs Union in each regional
block to be completed by - 2017
4. Establishing a continent - wide customs union ( and Free Trade Areas ) to be completed by 2019
5. Establishing of a continent-wide African Common Market (ACM) to be completed
by 2023
6. Establishing a continent -wide economic and monetary union and a common currency and a parliament to be completed by 2028 (already done).
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Assembly/AU/Dec.394 (XVIII)
4. Decision on Boosting Intra-African Trade and fast tracking the continental Free Trade Area Doc EX.CL/700(XX)
These timelines have been set up and approved by the Policy Organs of the OAU / AU, so as to give, clear guidelines to all executing and implementation agencies, within the African Union Regions Integration Programs, and, are binding on all state parties to the Abuja Treaty. In accordance with above regional integration implementation timelines, the liberalization of air transport services in Africa was to be carried out as provided for in the Yamoussoukro Decision of 1999. As in all other regional integration programs, this program, was to be implemented by, within, and between the regional economic communities ( RECs), in a flexible manner, but within the agreed overall timelines and by adopting what was described as a variable geometry and multiple speed approach. In conformity with the above stated principle, the COMESA policy organs chose to implement its air transport liberalization program in two phases, as promulgated and articulated in the COMESA Legal Notice No 2 of 1999. This also means that this process ought to be completed within the stage 3 timeline. However the legal notice was planned to be fully implemented by August 12, 2002 in line with the YD.
Decides that the CFTA should be operationalized by the indicative date of 2017, based on the framework, Roadmap and Architecture, with the following appropriate milestones;
1. Finalization of the East African Community (EAC)- the Common Market for Eastern and Southern Africa (COMESA)- Southern African Development Community (SADC) Tripartite FTA initiative by 2014;
2. Completion of FTA(s) by Non-Tripartite RECs, through parallel
arrangement(s) similar to the EAC-COMESA-SADC Tripartite Initiative or reflecting the preferences of their Member States, between 2012 and 2014;
3. Consolidation of the Tripartite and other regional FTAs into a Continental
Free Trade Area (CFTA) initiative between 2015 and 2016;
4. Establishment of the Continental Free Trade Area (CFTA) by 2017 with the option to review the target date according to progress made.
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2.1 Introduction
The general purpose of this Study is to review the status of implementation of the COMESA air transport liberalization programme by providing an objective and systematic inventory of issues on the status of implementation of Legal Notice No. 2 of 1999 on the COMESA Regulations for the Implementation of the Liberalized Air Transport Industry hereafter referred to as Legal Notice No.2. Accordingly, the main objective of the study is to determine the extent of Air Transport Liberalization within the COMESA states following the promulgation of the COMESA Legal Notice No. 2 of 1999 and to make where possible practical proposals on how to progress the implementation faster and further. The proposed study on the status of the COMESA Legal Notice No 2 of 1999 on the liberalization of air transport services is timely, necessary and appropriate. It is important that we take stock of the level of compliance and implementation of the Legal Notice nearly fourteen (14) years after it was promulgated and 45 years after the founding of AFRAA. It should be noted that full implementation of the COMESA legal notice and the YD were to be completed by 12th August 2002.
The COMESA Notice was to be implemented in two phases as follows:
o The first phase entailed the automatic granting of traffic rights for airlines to operate up to two daily passenger services/frequencies between city pairs, provided the airlines both State owned and privately owned were licensed and issued with valid operating permits by national competent authorities. Freight services were fully liberalized.
o Phase two of the COMESA Legal Notice Number 2 provided for the complete
liberalization of the COMESA air transport market i.e. deregulation of 5th, 6th, 7th, 8th and 9th freedom traffic rights and creating a “regional domestic air transport market”.
It should be kept in mind that the COMESA air transport liberalization programme was part of the overall initiative by the OAU/AU to liberalize air transport services in Africa, within the framework of the Yamoussoukro Declaration of 1988 and later the Yamoussoukro Decision of 1999. The purpose of this study therefore, is to determine the level and stage of implementation of the Legal Notice. The implementation process should ideally, now be at stage 3 (2007 and 2017) of the Regional Integration 6 stage implementation timeline.
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Both the Yamoussoukro Decision and the COMESA Legal Notice were instruments promulgated by the OAU / AU and the COMESA Policy Organs respectively, to facilitate air transport liberalization programs in Africa, and COMESA. The outcome of a successful completion of this program was expected to:
o establish a single unified and seamless African air transport services market and
o a single unified and seamless African airspace. The study will establish to what extent these objectives have or have not been met, identify and document challenges inhibiting the process, make findings, conclusions and recommendations, and, propose a recommendations implementation matrix.
2.2 Background and Context
2.2.1 The African Scene The vision of a strong and united Africa has existed since the early days of Pan Africanism, but it was after May 25, 1963, when the OAU was established in Addis Ababa, Ethiopia, that this dream was given practical meaning. Between 1963 and 1994 when the Abuja treaty was ratified to operationalize the Lagos Plan of Action and the Final Act Lagos, much had been achieved by Africa including the liberation of the continent. When the African Heads of state and Government established and ratified the Abuja Treaty, they also agreed on a clear 6 - stage regional integration program, and set out a timeline, starting 1994 and ending in 2034, for the implementation and completion of this process. It is in this context that the COMESA Policy Organs directed the Directors of Civil Aviation and Aeronautical Authorities to meet and come up with an air transport liberalization plan as part of the Free Trade Area (FTA) program for COMESA. The first meeting of the COMESA CAA / AAs held in Lusaka Zambia from 6-7, Nov, 1998, recommended the COMESA Legal Notice which was approved and promulgated in 1999.
It is also within this context and framework, that the African Ministers responsible for Civil Aviation, meeting in Yamoussoukro Cote D'Ivoire in Nov 1999, made a decision to implement the Yamoussoukro Declaration of 1998.
The COMESA FTA was launched in 2000 within the Abuja Treaty framework and timelines.
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The Yamoussoukro Decision (YD) of 1999, for the liberalization of air transport in Africa, was a decision to implement the Declaration. The COMESA Legal Notice of 1999 and the Yamoussoukro Declaration of 1988 informed the Yamoussoukro Decision of 1999 and therefore constitute one and the same program for the purpose of this study. The level and extent of the implementation of both YD and COMESA legal notice has been the subject of intense studies and evaluations for the last 14 years, since the two instruments were promulgated in 1999. The following are some of the studies and evaluations of the YD and the COMESA legal notice carried out between 1999 and 2013:
• Assessment of Potential Impact of Implementation of the Yamoussoukro Decision on Open Skies Policy in the SADC Region, 2009 by Rexter Ndhlovu
• Study on the Evaluation of Implementation of Legal Notice No. 2 of 1999 on the COMESA Regulations for the Implementation of the Liberalised Air Transport Industry, 2008 by Rexter Ndhlovu
• SADC by Hydroplan in 2009
• ECOWAS by Dr. Paul Antoine Marie Ganemtore in 2011
• ECCAS by DRC and Cameroon CAAs consultants commissioned by the AUC in
2011
• North Africa by Mohamed Taleb of the ECA in 2011
• The AUC by SAFRECO in consortium with Collet Consulting in 2011
• Modeling the Effects of Air Transport Liberalization on the Airline Industry by Pukar KC.
• The Economic Effects of Progressive Air Transport Liberalization in Africa by
Megersa Abera Abate.
• The economic impacts of air transport liberalization by Grancay, Martin.
• World Bank Report (2010) on implementation of Yamoussoukro Decision by Dr. Charles Schlumberger.
All these studies have been commissioned by and presented to the policy organs of the OAU / AU and COMESA and other RECs, debated and discussed in several forums; organized and funded by member states and partners throughout the continent.
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Therefore, it is correct to state that over the last fourteen (14) years the level and extent of implementation of the YD and COMESA Legal notice have been studied, evaluated and analyzed many times over.
What may perhaps not have been clear to many students and consultants’ examining the African air transport liberalisation scene is the approach and orientation taken by Africa right at the start of the whole liberalisation process. The African position and approach, as articulated by AFCAC at the 4th ICAO organized Worldwide Air Transport Conference in Montreal Canada from Nov 23 – Dec 1994, was that; the liberalization of air transport in Africa will be guided by the Yamoussoukro Declaration of 1988; and that process will be implemented in a Gradual, Orderly, Progressive and Safeguarded manner, a principle then popularized as - GOPS. This approach dates back to the founding the OAU when there were two alternative approaches to the integration of Africa namely; (a) a progressive approach as advocated by the Casablanca Group and, (b) a gradualist approach as advocated by the Monrovia Group. The gradualist approach which is reflected in the African "GOPS " approach has informed all debates and discussions as regards the liberalization of air transport in Africa , including all deliberations at ICAO ever since the 4th Conference , and the same principle is reflected in the consequent 5th and 6th ICAO organized Worldwide Air Transport Conferences of 2003 and 2013 consecutively. It is this gradual, orderly, progressive and safeguarded approach to the liberalization of air transport services in Africa, and Africa's flexible regional integration approach, which must be considered and understood, as we study, examine and evaluate the level and extent of implementation of both the Yamoussoukro Decision of 1999 and the COMESA Legal notice of 1999. It is important this African position and approach be understood Africa's position as articulated by AFCAC at the 4th ICAO organized Worldwide Air Transport Conference in Montreal Canada in 1994, was therefore that, each ICAO member state should liberalize air transport services at its own pace, and, in a manner considered most appropriates to its conditions. Africa as opposed to the USA opted for a gradual, orderly, progressive and safeguarded (GOPS) approach to its air transport liberalization process. It must also be remembered that the 4th ICAO organized world-wide air transport conference was initiated and presided over by Africa, and in this forum, Africa through AFCAC, articulated and clarified its position as regards the liberalization of air transport in Africa to the rest of the world. All the other ICAO regional blocks understood, sympathized and accepted the African approach. This African approach became the approach generally approved by the
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Conference as is reflected in all future ICAO General Assembly meetings, and consequent resolutions, which then fed into the 5th and 6th worldwide air transport conferences of 2003 and 2013 respectively. This is an important and crucial finding and point to highlight as will be demonstrated later in this report. The African position at the 4th ICAO organised worldwide air transport conference in Montreal was informed by the Abuja Treaty, which in turn was informed by Yamoussoukro Declaration of 1988 , which was later promulgated into the Decision of 1999 and, whose spirit and intent was to establish:
a) A single African air transport services market and b) A single African airspace.
This African safeguarded approach played into the hands, and was exploited by those in Africa and outside Africa, who did not fully subscribe to the whole idea of the Africa integration Agenda and who were generally hostile to the Abuja Treaty. The principle of a gradual, orderly, progressive and safeguarded approach to the implementation of both the YD and the COMESA Legal Notice ought to be the real and true yardstick upon which the liberalization of air transport services in AFRICA is measured and evaluated. It is generally assumed that, so long as the implementation falls within the 6 - stage regional integration timeline, then it is fine. This perception needs be re-evaluated, as those opposed to the whole integration agenda, tended to use it to slow and perhaps even to try and stop the process. The idea of “Safeguarded" approach was meant to deal with the following issues in a deliberate, realistic and pragmatic manner;
a) Air safety as in prescribed by the ICAO SARPS b) Security as broadly defined by states and the international community and c) The safeguarding of the sovereignty of member states and specifically over their
airspaces and the protection of the African internal air transport services market. This safeguarded approach, is what I call the missing "S" which needs to be unpacked, and discussed honestly, openly and candidly. The idea of a single African airspace is likely to remain a bone of contention so long as the missing "S" is not addressed. The missing "S" will be explained later in this report.
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2.2.2 The global Scene As part of the global movement to deregulate and liberalize trade, including transport services, different countries and continents adopted varying approaches. Perhaps to note here is the approaches taken by the USA and Europe as compared with that taken by Africa. The USA decided on an immediate Open Skies Policy while the EU decided on a gradual and phased approach much like that adopted by Africa. It is important then to keep all these various approaches in perspective, as we study and evaluate the liberalization of air transport services in Africa, and specifically, the implementation of the YD and the COMESA legal notice.
2.2.3 The Study objective The main objective of the Study was to determine the level of implementation of Legal Notice No 2 of 1999 and the constraints encountered by various parties and to make where possible practical proposals on how to progress the implementation further. In particular, the Study was to identify the main constraints that member States and airlines faced with respect to the following issues:
• Granting of Traffic Rights including the Fifth Freedom; • Designation of operators; • Cooperation among airlines to facilitate code sharing and interlining agreement;
and • Compliance of airlines with existing norms against anti-competitive practices.
Over 10 studies and evaluations have been carried out on the implementation of both the YD and the COMESA legal notice, and the reports, findings recommendations of these studies have been subjected to numerous policy organs evaluations and more discussions, evaluations and recommendations There is therefore some malaise and a sense of fatigue creeping in and many people interviewed feel unenthusiastic to respond to additional interviews or respond to questionnaires. Many feel that enough evaluations have been carried out and it was time to move and act and put in place clear measures and implementation timelines with enforceable mechanisms. Airlines would like to see the concept of a single African air transport services market established with clear mechanisms of enforcement as soon as possible, while the CAA / AAs do not display the same enthusiasm and sense of urgency, especially about a single African airspace.
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All the studies and evaluations so far carried out, agree that a failure to put a clear set of implementation timelines and lack of enforceable mechanisms is a great weakness.
2.2.4 Methodology and Approach The following methodology was adopted;
a) A review and examination of all documents tabulated and included in the Annex, all the reference materials indicated in the indices and others not included.
b) Interviews, formal and informal conversations with key individuals considered to
have information relevant to this study.
c) Preparation of questionnaires targeted to the following specific and selected institutions and organizations:
• All COMESA CAAs/AAs • AFRAA • AFCAC and the AU/ECA • ACI – Africa Chapter • COMESA Tourism Authorities
d) All the questionnaires were posted and responded to on line. This was new and posed some challenges which if and when addressed will make future data collection in COMESA cheap, efficient and effective.
e) Receiving, collating, compiling and analyzing all the responses to the questionnaires and email, comparing and rechecking and verifying the answers to the questionnaires, the oral information received from interviews, conversations, discussions and meetings.
2.2.5 The missing "S" Concept The COMESA Ministers responsible for Civil Aviation directed that COMESA Directors of Civil Aviation meet and work out modalities of liberalizing all air transport services in COMESA with the objective of establishing a single COMESA air transport service market in conforming to the FTA timetable. The Policy Paper presented by the COMESA Secretariat at this meeting recommended “a Gradual, Orderly, Progressive” implementation of the programme. The word “safeguarded" was not included in the recommendations of this first meeting of the COMESA CAA held in Lusaka, Zambia from 6th-7th November 1998. This omission the word ‘safeguarded’ was deliberate.
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However, at the AFCAC Preparatory meeting for the 4th ICAO organized conference held in Montreal, Canada from November – December 1994, the African position was that the programme was to be gradual, orderly, progressive and safeguarded. The "Safeguarded” portion of the implementation has remained controversial throughout the implementation process, as it embraces safety, security , sovereignty of member states over their airspace, and the protection of the African air transport services internal market. This missing “S” needs to be addressed very specifically as regards the establishment of the single COMESA airspace as a prerequisite to the establishment of a COMESA Air Transport Services Market.
2.2.6 Pan-African Youth Movement for Africa’s Renaissance and the Liberalization of Air Transport Services in Africa Compared to the intra-Africa road and rail network connectivity, intra-Africa air transport connectivity has always been considered the easiest and one that will have the most immediate impact on the regional integration agenda. It is a low lying fruit. This was the main reason given at the founding of AFRAA in Accra Ghana in 1968. It was felt by the founders of AFRAA that it was cheaper and faster to interconnect Africa by air than by road or rail. All that was needed was to do away with Bilateral Air Services Agreements (BASAs) between African and remove any and all restrictions on any African airline operating within Africa. In that sense Africa was ahead of both the USA and the EU. It is unfortunate that forty five (45) years down the road Africa is still grappling with BASAs between AU member states. This is one of the reasons why the Africa Youth Caravan has been organised. The youth caravan will bring together up to 30,000 young people, who will travel by buses from each of the 54 capitals of the states of the Union to the capital - Addis Ababa Ethiopia. The caravans are expected to arrive at Addis Ababa on May 2014 to be part of the Africa youth forum which will mark the end of the OAU/AU jubilee year celebrations and participate at the AU Heads of State and Government summit. It is hoped that the experience of the youth driving across Africa to Addis Ababa will demonstrate that it is easier and cheaper to link Africa by air than by road or rail. Hopefully this experience will persuade the Heads of State and Government assembled in Addis Ababa to decide to expedite the air transport liberalisation process among
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other issues, including the removal of visa requirements for travel of African citizens across Africa. The map below shows the route the African Youth Caravan will travel by road to Addis Ababa, Ethiopia
A PAN- AFRICAN YOUTH MOVEMENT FOR AFRICA’S
RENAISSANCE
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2.2.7 The Single African Airspace Africa like Europe, the USA and all other regions of the world realize and agree that the establishment of a single African airspace is a prerequisite to the establishment of a single African air transport services market
2.2.8 The SAS – Eldrow Resources The first meeting of the COMESA CAA /AA held in Lusaka Zambia 6-7 Nov 1998, recognized that the establishment of a COMESA single airspace was a prerequisite to the establishment of a COMESA single air transport services market. This fact was discussed during this first meeting , which is why , a proposal by Eldrow Resources, a USA based private company , to set up an entity or company in partnership with COMESA States on a PPP basis, under the auspices of the SAS , to manage and control the single COMESA airspace was thought to be feasible. However, the Eldrow proposal was rejected by the Third Meeting of Ministers of Transport and Communications held in October, 2000 in Khartoum, Sudan.
2.2.9 DORS Inc. Consultants- CNS / ATM Systems Study After the rejection of the Eldrow proposal another US company, DORS Inc Consultancy with funding from the US Trade Development Agency (USTDA) undertook three separate studies covering SADC, EAC and COMESA on alternative approaches for implementation of the CNS/ATM Systems. The recommendations from the DORs studies all favoured a common project establishing a single COMESA –EAC-SADC airspace within the tripartite framework.
2.2.10 ASECNA / UNESCO - CNS / ATM Contract At the level of Africa, ASECNA has been awarded Euro 2.8m contract for the implementation of a Global Navigation Satellite Systems Across Africa, This contract comes under a Euro 9m program entitled “ Support for the Airline Industry and application of satellite services in Africa”. It will be useful if the work of DORS Inc. Consultants and that of ASECNA / UNESCO were harmonised.
2.2.11 African Common Civil Aviation Policy (AFCAP) The AU Heads of State and Government have adopted an African Common single aviation policy AFCAP. However this policy has not yet been publicised and popularized within and among aviation agencies responsible for its implementation in the various parts of the continent.
17
It will be useful is this policy is implemented by all member states of the AU.
2.2.12 AUC Strategic Plans Aspects of AUC 2014 to 2018 Strategic Plan and specifically, the 8 identified priority areas which deal with infrastructure and energy, where the YD and COMESA legal notice should be harmonized with COMESA and Tripartite programs.
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Chapter 3
3.0 Findings 3.1 Status of Implementation of Legal Notice No. 2 of 1999
After a thorough examination of all relevant documents, an analysis of the data and information collected, gathering views and opinions from selected key players in the air transport industry, Chapter 3 documents the findings of this study. Looking at the analysis, there is clear evidence that there has been real improvement in intra Africa air transport services connectivity between 1999 and 2013. What cannot be ascertained from the data and information collected, is how much of this increase is solely due the implementation of the YD or the COMESA Legal Notice, and, how much is attributable to other factors. During the early phase of implementing the COMESA legal notice and the YD, many African airlines collapsed, especially those, so called flag carriers, who depended on state support and protection. Again a combination of liberalization, and the IMF / World Bank imposed SAPS and the vulgarity of market forces all combined to force many African carriers into bankruptcy. The jury is out there whether this was good for a young African air transport industry , or even for regional integration or indeed , whether the YD and or the Legal Notice was the cause of the collapse of these airlines. At the moment, over fifty percent of African Union member states have signed open skies agreements with non-AU members states, and several African airlines have entered into global alliances with non-African carriers. For the purpose of this study, the implementation of the legal notice is the same as implementing the YD. The table below show how states are implementing the Legal Notice States Implementing Legal Notice No. 2 States that are Granting 5th Freedom Rights 1 Burundi Burundi 2 Egypt Egypt 3 Eritrea Rwanda 4 Kenya Sudan 5 Malawi Uganda 6 Rwanda 7 Sudan 8 Uganda 9 Zambia 10 Zimbabwe Source: COMESA Reports
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3.2 Impact of Liberalization Implementation of Phase I has so far yielded a positive impact on the air transport industry of the countries implementing the Legal Notice No. 2.
1. Those countries implementing the air transport liberalization programme have experienced increases in the frequency of flights between city pairs. For example, air traffic frequencies between Nairobi, Kenya and Entebbe, Uganda have increased from two flights per week before liberalization to about thirty-four flights per week. Furthermore, between Nairobi and Cairo flights have increased from twice a week to eight and between Harare and Nairobi from two a week to twelve. With this increase in frequencies one of the main benefits is that it is now possible to make a return trip within a day between parts of the region.
2. There are indications that with the implementation of air liberalization passengers
are benefiting from considerably cheaper fares on certain routes. For example the fare between Nairobi and Entebbe has dropped by nearly half. The lower prices are as a result of heightened competition on these routes.
3. There has been an increase in commercial co-operation between COMESA air
carriers in terms of code sharing and other mutual arrangements. These agreements often give carriers access to a bigger pool of customers. The code-sharing agreements enable the airlines to place their two-letter codes on flights operated by their partners. This means that airlines can fly passengers to one city and then offer them onward flights to destinations they do not serve but which their partners do.
4. Airports have increased their revenue inflows as a result of the increase in the
number of landings, from parking fees, navigation charges and other airport facilitation charges.
5. There has been an increase in the establishment of new privately owned airlines.
These start-up airlines have been able to access the market through the policy of multiple designations. This has greatly improved competition and increased consumer choice.
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3.3 Liberalization Constraints While some progress had been made various stakeholders also reported a number of difficulties and impediments they had encountered in the course of implementing the regional air transport liberalization programme. The difficulties and constraints include the following;
i. Non enforceability and lack of enforcement mechanism of Legal Notice No 2 as it had not been domesticated by any member State.
ii. Absence of a follow up mechanism
iii. Continued use of bilateral air services agreements to implement the regional air
transport liberalization programme. iv. Lack of harmonized regulations that would facilitate the implementation process.
v. Reluctance by States that claim to have weak airlines to embrace full
implementation as their airlines do not derive direct benefit from the process. These States are also concerned that full implementation would drive their national carriers out of business.
vi. Inadequate capacity of most COMESA air carriers to participate fully in the
liberalization process. Only a few airlines are participating in the process and benefiting from it.
vii. Lack of political will to live up to the commitment of full implementation of the
liberalization programme. 3.4 Enforceability of Legal Notice No 2 Most States consider the lack of domestication of Legal Notice No. 2 and non-enforceability as the major impediment to implementation of the air transport liberalization programme. There has been a conspicuous lack of actions to complement and internalize the COMESA programme at the national level of each country. No State so far had taken steps to domesticate the Legal Notice. 3.5 Implementation Level The evaluation was made from the perspective of compliance with key provisions of the liberalization programme in Articles 2, 3, 5 and 10. Article 2 outlines the time table for the Implementation of the liberalized air transport industry while Article 3 specifies conditions for market access; i.e. eligibility criteria for designation. Article 5 removes restrictions on capacity, frequencies and in the granting
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of traffic rights. Another key provision is Article 10 concerning ownership and control of carriers. These are the pillars of liberalization. These parameters are the essential principles and form the substructure of the liberalization programme. 3.6 Compliance with the YD
For all practical purposes compliance with YD is compliance with the Legal Notice within COMESA. The table below summarizes the status of implementation of the YD programme at the continental level. Grading the level of the Implementation of the Yamoussoukro Decision Community
Status of YD Implementation
Status of air services liberalization
Implementation score*
AMU No implementation No liberalisation within the AMU initiated, but need is recognized
1
BAG Principles of the YD agreed upon in a multilateral air services agreement
Up to fifth freedom granted, tariffs are free, and capacity/frequency is open
4
CEMAC Principles of the YD agreed upon in an air transport program. Some minor restrictions remain
Up to fifth freedom granted, tariffs are free, and capacity/frequency is open. Maximum two carriers per state may take part
5
COMESA Full liberalization decided (“legal Notice No. 2”), but application and implementation remain pending until a joint competition authority is established
Pending. Operators will be able to serve any destination (all freedoms), and tariffs and capacity/frequency will be free
3
EAC EAC council issued a directive to amend bilateral among the EAC states to conform with the YD
Air services are not liberalized, as the amendments of bilateral remain pending
3
SADC No steps taken toward implementation, although the civil aviation policy includes gradual liberalization of air services within the SADC
No liberalization has been initiated 2
WAEMU The YD is fully implemented All freedoms, including cabotage, have been granted. Tariffs have been liberalized
5
Source: Schlumberger 2008: 311 *Score: 1 = no or less liberalization; 5 = closed to full liberalization
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3.7 Summary of Findings
• No member state of COMESA has implemented fully the COMESA Legal Notice No 2.
• Ten member states have partially implemented the COMESA Legal Notice No 2 • Nine states have not implemented • One state has sought derogation. • The Legal Notice and the YD is one and the same instrument. • It is difficult to ascertain and disaggregate what increases in intra COMESA,
intra- Africa city pair frequencies are solely due to the YD and COMESA Legal Notice No 2 and what are attributable to other factors.
The reasons given for non-compliance include the following;
• Lack of an enforcement mechanism • Lack of competition rules • Lack of a regulatory framework. • Lethargy towards the whole regional integration project • No clear eligibility criteria on ownership , effective control and right of
establishment 3.8 Air services frequencies in COMESA city pairs, multiple designations and fares
• Many city pairs now have multiple designations. • The multiple designations have led to increased frequencies and • Reduced fares due competition.
3.9 Air Services Frequencies on City Pairs with Multiple Designations and the airfares Charged The following are the city pairs within COMESA with multiple designated carriers, fares charged and frequency per year.
City Pairs No. Designated Carrier
Cost ($) of Ticket Freq. per Year
ADD – BJM 2 Carriers 800 - 1100 354 ADD – CAI 3 Carriers 500 - 850 691 ADD – EBB 3 Carriers 720 - 1200 733 ADD – HRE 3 Carriers 1200 - 1600 - ADD – JIB 2 Carriers 350 - 1200 1128 ADD – KGL 2 Carriers 630 - 2500 733 ADD – FIH 3 Carriers 950 - 1700 366 ADD – LLW 3 Carriers 920 - 1700 352 ADD – LAD 3 Carriers 1000 - 1500 157 ADD – LUN 3 Carriers 950 - 1700 366 ADD – NBO 3 Carriers 300 - 1700 1185 TNR – MRU 3 Carriers 450 - 970 - ASM – CAI 3 Carriers 906 - 1258 241 ASM – JIB 3 Carriers 1200 - 1700 -
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BJM – EBB 3 Carriers 520 - 1385 - BJM – Kigali 3 Carriers 1030 - 1715 1184 BJM – NBO 4 Carriers 400 - 1400 1647 CAI – KRT 4 Carriers 350 - 1500 1456 CAI – NBO 7 Carriers 520 - 1300 671 JIB – NBO 3 Carriers 640 - 800 462 EBB – CAI 6 Carriers 630 - 1900 221 EBB – KGL 3 Carriers 400 - 600 566 EBB – NBO 5 Carriers 270 - 1000 1145 HRE – CAI 5 Carriers 890 - 2180 - HRE – LLW 4 Carriers 735 - 1500 - HRE – LAD 5 Carriers 915 - 1300 - HRE – LUN 3 Carriers 360 - 780 358 HRE – NBO 3 Carriers 870 - 1200 567 KRT – ADD 3 Carriers 870 - 1100 578 KRT – NBO 3 Carriers 870 - 1500 354 KGL – NBO 3 Carriers 350 - 600 1446 FIH – NBO 2 Carriers 600 - 1500 470 LLW – LAD 3 Carriers 700 - 1400 - LLW – LUN 3 Carriers 815 - 1750 162 MPM – NBO 3 Carriers 870 - 1015 158 NBO – LLW 5 Carriers 924 - 1750 463 NBO – LAD 4 Carriers 850 - 1450 104 NBO – LUN 5 Carriers 780 - 1500 669 NBO – MRU 3 Carriers 1200 - 3500 - MRU - SEZ 3 Carriers 370 - 1500 -
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Below are Comparative matrixes of city pair frequencies between 1998, 2002 and 2012 Weekly Scheduled Passenger Air Service Frequencies between Capital City Pairs in COMESA 1998
WEEKLY SCHEDULED PASSENGER AIR SERVICE FREQUENCIES BETWEEN CAPITAL CITY PAIRS IN COMESA 1998
From / To A AbabaAnta/rivo AsmaraBujumbura Cairo Comoros Djibouti Entebbe Harare Khartoum Kigali KinshasaLilongwe Luanda Lusaka ManziniMauritiusNairobiSeychellesWindhoe
Addis Ababa 4 6 3 2 2 2 1 1 2 7
Antananarivo 1 6 2 1
Asmara 0 2 2
Bujumbura 0
Cairo 4 2 3 1 1 3 4
Comoros 1 1
Djibouti 6 2 3
Entebbe 3 1 1 2 11 1 1 26
Harare 2 1 1 9 1 9 6
Khartoum 3 2 2
Kigali 2 11 2 7
Kinshasa 2 1 2 1 3Lilongwe 1 9 5 6
Luanda 1 1 1 4
Lusaka 2 1 9 5 5
Manzini
Mauritius 6 4 3
Nairobi 7 2 4 26 6 2 7 3 6 5 4 1
Seychelles 1 1 3 1
Windhoek 4
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Weekly Scheduled Passenger Air Service Frequencies between Capital City Pairs in COMESA – 2002
WEEKLY SCHEDULED PASSENGER AIR SERVICE FREQUENCIES BETWEEN CAPITAL CITY PAIRS IN COMESA - 2002
From / To A AbabaAnta/rivo AsmaraBujumbura Cairo Comoros Djibouti Entebbe Harare Khartoum Kigali KinshasaLilongwe Luanda Lusaka ManziniMauritiusNairobiSeychellesWindhoe
Addis Ababa 4 1 4 7 1 2 4 2 2 1 3 13
Antananarivo 2 4 1
Asmara 1 3
Bujumbura 4 2 10 6
Cairo 1 1 2 1 4 6
Comoros 2 1
Djibouti 4 2
Entebbe 7 2 2 2 28
Harare 1 1 5 14 11
Khartoum 2 4 6
Kigali 4 10 2 7
Kinshasa 2 5
Lilongwe 2 5 4 8
Luanda 1 3
Lusaka 3 14 4 9
Manzini
Mauritius 4 2
Nairobi 13 1 3 6 6 2 28 11 6 7 5 8 9 2 2
Seychelles 1 2
Windhoek 3
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Weekly Scheduled Passenger Air Service Frequency between Capital City Pairs in COMESA-July 2012
WEEKLY SCHEDULED PASSENGER AIR SERVICE FREQUENCIES BETWEEN CAPITAL CITY PAIRS IN COMESA (JULY, 2012)
From / To A AbabaAnta/rivo AsmaraBujumbura Cairo Comoros Djibouti Entebbe Harare Khartoum Kigali KinshasaLilongwe Luanda Lusaka ManziniMauritiusNairobiSeychellesar es Salaamohannesbur Maputo
Addis Ababa 4 11 13 7 8 10 7 11 7 3 7 19 5 7
Antananarivo 2 4 1 7
Asmara 1 2
Bujumbura 11 2 10 7
Cairo 5 4 14 5 5 7
Comoros 2 1 3
Djibouti 13 2 4
Entebbe 7 2 16 28
Harare 8 1 2 2 4 2 2 2 14
Khartoum 10 7 8
Kigali 4 8 16 10 3 4
Kinshasa 11 5
Lilongwe 7 3 3
Luanda 3 2 1 3
Lusaka 7 10 4 1 7 3 28
Manzini 6 3
Mauritius 4 2 2 2 4
Nairobi 19 1 7 9 1 4 28 7 8 14 5 10 3 11 2 3 32 21 6
Seychelles 3 2 3
Dar Es Salaa 7 4 4 3 28 28 3
Johannesbur 21 7 7 7 14 6 18 7 6 8 6 36 4 4 21 7 28 20
Maputo 6 3 20
Important Notes
Burundi, Egypt, Eritrea, Kenya, Malawi, Rwanda, Sudan, Uganda, Zambia and Zimbabwe are implementing Legal Notice No 2Burundi, Egypt, Rwanda, Sudan and Uganda are granting Fifth Freedom Rights. This has given them increased connectivity and service frequencies
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NOTES: 1) First matrix gives the frequencies in 1998 before the Legal Notice was
promulgated
2) The second matrix gives the intra-COMESA city pair frequencies by the end of 2002
3) The third table gives intra-COMESA city pairs frequencies by end of 2012 – a 10
year difference from 2002.
4) It is important to re-emphasise and highlight that both the COMESA Legal Notice and the YD were expected to have been fully implemented by 12th August 2002
5) It is clear from the three tables / matrices above, that there is noticeable increase
in city pair weekly frequencies from 1998 through to 2012. Remember that from August 12, 2002 to August 12, 2012 was to be the period of the full and complete liberalization of intra-COMESA Air Transport Services in the frame work of the Legal Notice and the YD. The fact that this has not been actualized should be a subject of concern to all COMESA member states.
3.10 Cargo Airlines Operating in Africa Below is a table of all cargo carriers operating in Africa.
Non-African Cargo Carriers African Cargo Carriers 1 Air Cargo Germany Africa West 2 Air France Air Mauritius 3 Aryan Cargo Express Astral Aviation 4 British Airways Avient Aviation 5 Cargolux Airlines International D-Connection 6 Click Airways Equaflight 7 Coyne Airways Ethiopian Airlines 8 Emirates Gabon Airlines Cargo 9 Etihad Airline Global Aviation and Service Group 10 KLM Kenya Airways 11 Lufthansa German Airlines Royal Air Maroc 12 MartinAir South African Airways 13 Premium Jet Stabo Air 14 Qatar Airline 15 Royal Jordanian 16 Rus Aviation 17 Sahara Air Cargo 18 Saudi Arabian Airlines 19 Singapore Airlines 20 Starlight Airlines 21 Trans Mediterranean Airways 22 Turkish Airlines
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3.11 Freight Traffic In general intra Africa cargo traffic very low constitutes only about 5% of cargo traffic globally. The reasons for this underdeveloped intra Africa cargo market is given elsewhere. About 70% of all freight business in Africa, of cargo is carried between Africa and other regions. The outbound freight is composed mainly of perishables, while inbound is manufactured and consumer goods. The failure by many airlines to develop the cargo component of their operations has led to dominance of this sector by non-African airlines. On the domestic and regional levels, airlines have lost the freight business to rail and road transporters due to lack of capacity and bureaucratic customs clearance processes at airports. Note: Cargo volume within and from Eastern Africa to Southern Africa account for more than 50% of total cargo in Africa. The picture below shows the intra – Africa cargo movement.
Source: IATA, Lufthansa Consulting Analysis 3.12 Selected routes within Africa with high potential for air cargo
High Potential Medium-High Potential Medium-Low Potential NBO to/from LUN ADD to NDJ ADD to JUB JNB to/from ADD ADD to LAD BKO to/from BBO
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3.13 Cargo Freight Frequency of Non-African Carriers (Within COMESA)
Carrier Frequency per Year Africa Air Cargo Germany 61 Air France 105 Emirates 53 Etihad 152 MartinAir Holland 399 TOTAL 770
3.14 Cargo Freight Frequency of African Carriers (Within COMESA)
Carrier Frequency per Year Astral Aviation 208 D-Connection 104 Ethiopian Airlines 1,387 Kenya Airways 102 South African Airways 155 TOTAL 1,956
3.15 Cargo Freight Rates
Carrier Cost in $ per Kilogram African Cargo Carriers 50-150 African Passenger Carriers 35-150 Non-African Cargo Carriers Non-African Passenger Carriers
Note: There are no exact figures available 3.16 Status of Regional Airports
Currents Hubs Potential Hubs Oliver Tambo International (South Africa) Bole International (Ethiopia) Cairo International (Egypt) Djibouti International (Djibouti) Cape Town International (South Africa) Moi International (Kenya) Mohammed V International (Morocco) Entebbe International (Uganda) Hurghada International (Egypt) Kenneth Kaunda International (Zambia) Jomo Kenyatta International (Kenya) Sharn El Sheihk International (Egypt) King Shaka International (South Africa) Murtala Mohammed (Nigeria) Carthage International (Tunisia)
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3.17 Freedom Rights Enjoyed by Airlines within COMESA Airline 5th Rights 6th Rights City Pair Serviced City Pair Denied 5TH
Rights Air Burundi - - Comores Air Services
- -
Korongo Airlines - - Djibouti Air - - Egypt Air Yes - NBO-EBB, HRE-LUN Air Cairo - - Cairo Aviation - - Ethiopian Airlines Yes No KRT-CAI, BJM-KGL, KGL-
BJM EBB-NBO, NBO-KGL, NBO-BJM, JUB-EBB
Kenya Airways Yes No KRT-CAI, ADD-JIB, ADD- DUBAI
EBB-FKI, LLW-LUN, KGL-BJM and LUN-HRE
Fly 540 - - African Express - - Air Madagascar - - Air Malawi - - Air Mauritius - - RwandAir - - Air Seychelles - - Sudan Airways Yes ADD-JIB, ADD-DUBAI Air Uganda - - Zambezi Airlines - - Air Zimbabwe Yes LUN-Lubumbashi,
Kinshasa/Luanda, Dar es laam-Nairobi
Non-COMESA British Airways Gulf Air Emirates Yes ADD – DXB LUN -HRE Etihad KLM Lufthansa South African Airways
Yes Ndola-BB
Turkish Airline Qatar Source: Comesa Reports and Responses from the States From the above tables it is clear to note that:
• There is greater flexibility in the granting of 3rd and 4th freedom traffic rights. Virtually all States freely grant the 3rd and 4th freedom traffic rights.
• Fifth freedom traffic rights are still a major problem. The majority of States do not
grant Fifth Freedom Traffic Rights as provided in phase 1 of Legal Notice No.2. Burundi, Egypt, Ethiopia, Rwanda, Sudan and Uganda are the only States that had granted 5th freedom traffic rights.
• Burundi, Egypt, Ethiopia, Rwanda, Sudan and Uganda grant 5th freedom traffic
rights. Kenya, Malawi, Zambia and Zimbabwe had revised or are in the process
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of revising their BASAs to provide for 5th freedom traffic rights on reciprocal basis.
• Fifth freedom traffic rights are exercised only on three intra-COMESA sectors;
Addis Ababa-Djibouti, Bujumbura-Kigali, and Khartoum-Cairo.
• States that claim to have weak airlines are reluctant to grant fifth freedom traffic rights as provided in legal Notice No.2 of 1999 for fear that their carriers could be driven out of business while those with strong airlines generally support implementation of the provision on the granting of 5th freedom traffic rights.
3.18 Extent and impact of franchising, code sharing, airline alliances, and interlining within the Region All airlines operate on the basis of what is normally defined as the 4 Cs principles, which are Cooperation, Collaboration, Competition and Competence. It is on the basis of these principles that airlines agree to code share, interline, sign franchise agreements and global alliances. It must be understood that African airlines are not driven by the need to integrate Africa, but the need to make a return on their investments and pay dividends to their shareholders. However there is need to carry out a thorough evaluation on the impact this cooperation between African airlines and non-African airlines have on Africa’s regional integration agenda.
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Passenger Traffic Patterns – annual and seasonal
From the above data obtained from AFRAA it is clear that intra Africa air transport traffic is still low:
Several reasons have been identified in this study for this low intra Africa air transport traffic as follows:
• Misaligned Government policies and protectionism manifested by the failure of African states to implement the YD and the Legal Notice in the case of COMESA.
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• “Africa is a bit like Europe in the 70’s all routes are controlled by governments with a lot of protectionism built in” Ed Winter CEO Fast Jet.
• There are other reasons, including visa requirements, customs and high cost of
fares, due exorbitant and predatory taxation.
3.19 Tourism Resorts and Circuits
The map bellow show top African Attractions current and potential and top African Airports.
Source: AFRAA Discussion Panel on Aviation and Tourism on Tuesday 18th June, 2013
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Chapter 4
4.0 General, Pertinent and Salient Observations
4.1 Achievements and Shortcomings It is clear from the findings of this study that there have been major achievements and also some shortcomings or challenges experienced during the liberalisation of the Air Transport program in the COMESA region. The periods under review is from 1999 and below are the noted achievements as well as challenges. The following are the achievements;
• COMESA Legal Notice No 2 and YD promulgated in 1999 • COMESA Air Transport Regulatory Board Established • COMESA Air Transport Competition Regulations established • EAC Competition Regulations established • SADC Competition regulations established • The Joint Competition Authority (JCA) created • The Tripartite Model BASA designed. • AFCAC designated the YD AU Executing Agency • Numerous YD / COMESA studies commissioned. • Intra Africa air transport services increase from 5 to 20%.
The following are shortcomings;
• Contradicting and conflicting positions taken by member states on YD and Legal notice.
• No timeline on air transport liberalisation has been met • More than 50% of AU and COMESA member states have signed Open Skies
Agreements with non-AU / COMESA member states. • Many AU member states have granted 5 / 6 freedom rights to non-member
states where the same have been denied member states • All AU / COMESA member states exchange their traffic rights on the basis of
BASAs and neither YD nor Legal Notice. The following are observations;
• No COMESA or AU member state has faithfully complied with the YD or the COMESA Legal Notice No 2 as provided for in both these two instruments. However the letter and spirit of both documents seem to have influenced discussions and outcomes of many of the BASAs signed between member states.
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The Heads of State and Government have made a Decision to: (a) establish a single African air transport services market and (b) a single African airspace.
However there are forces inside and outside Africa opposed to this Decision
• The ownership, effective control and right of establishment as regards the
eligibility of a COMESA and or African airlines, in the context of the YD and the Legal Notice No 2 need to be revisited.
For example in the US an eligible US Carrier is clearly defined as follow:
A corporation organized under the laws of the United States of which the president and at least two-thirds of the board of directors and other managing officers are citizens of the United States, which is under the actual control of citizens of the United States, and in which at least 75 percent of the voting interest (read corporate stock with voting rights) is owned or controlled by persons that are citizens of the United States. Source: 49 USC § 40102(a)(15)
• US carriers are given special privileges in exchange for being members of the
Civil Reserve Air Fleet (CRAF) to assist in emergences at the US Government request.
• The implementation of AUC Decisions including the YD and COMESA Legal
Notice experienced difficulties because the vision of the AUC and the implementing Agencies are not realigned.
• The private sector and especially the private air operators will prefer to see the
liberalisation of air transport services within Africa and COMESA driven by market forces rather than the politics of regional integration.
• The harmonisation of the civilian and military use of the African airspace by non-
AU member states needs to be reviewed. • The work of ASECNA and that of the Tripartite on the unification of the African
airspace and specifically the implementation of the CNS / ATM in Africa need to be harmonized
• The establishment of a single African air transport services market within the single African airspace is a political not a technical decision.
• Decisions, Declarations, Resolutions and Recommendations of COMESA and or the AU need to be backed by clear funding mechanism.
• Many member states are stuck to the Westphalian nation state model of sovereignty not necessarily compatible with 21st century reality.
• The feasibility of establishing a single African airspace needs to be revisited.
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• The implementation of the African Common Civil Aviation Policy needs to
publicized
• The impact of African airline alliances , code sharing , interlining , and franchising need a deeper analysis and treatment in the context of the 4Cs of ( Competition, Cooperation, Collaboration and Competence) common to all airlines
• All studies and evaluations so far undertaken concur, that Africa needs accurate and reliable air transport statistics. The ECA share the same view and has stated its intention to set up an African statistics observatory which will also cover air transport.
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Chapter 5
5.0 Recommendations and Implementation Matrix
5.1 Recommendations From the analysis of the status of implementation of the COMESA Legal Notice No 2 the following are the recommendations put forward
1. Establish the COMESA single air transport services market;
2. Establish the COMESA single airspace;
3. Harmonize the work being undertaken by IGAD on the liberalization of air transport services with that of the Tripartite and the AUC, as regards the implementation of the YD and the COMESA Legal Notice No 2.
4. Organize a joint Tripartite meeting for Ministers responsible for civil aviation to
approve recommendations 1, 2 and 3 above and to authorize, give specific instructions, mandates and timelines, to relevant organs within the tripartite arrangement to complete the process of their implementation within the timeline.
5. Strengthen and operationalize the Tripartite as the second pole and designated
platform for the implementation of both YD and COMESA Legal Notice No 2.
6. Expedite the operationalization of the JCA.
7. Harmonize the work of the Tripartite on the implementation of the YD and COMESA Legal Notice No 2 with that of the AUC.
8. Set up an accurate and reliable air transport statistics observatory.
9. Revisit, review and reconsider the wisdom of the continued push to comply and
implement the YD and the Legal Notice No 2 in their current formulation, and, instead refocus on and popularize the establishment of the single air transport services market and the single air space and;
10. Re-evaluate the notion of ownership, effective control and the right of
establishment regimes in Africa and COMESA in the context of implementing the YD and COMESA Legal Notice No 2;
11. Formulate a white paper or policy document on the establishment of both a
single African air transport services market and a single African airspace conformity with the Abuja Treaty to be approved by the AU Assembly
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Chapter 6
6.0 Implementation Matrix
6.1 The Recommendation Implementation Matrix Recommendation/Action Timeline Implementing
Agency Budget
1 Establish the COMESA single air transport services market
2015 COMESA (Within the Tripartite)
To be determined
2 Establish the COMESA single airspace 2017 As above To be determined 3 Harmonize the work being undertaken
by IGAD on the liberalization of air transport services with that done within and the AUC the Tripartite as regards the implementation of the YD and the COMESA legal notice
2014 The Tripartite and AU
To be determined
4 Organize a joint Tripartite meeting for Ministers responsible for civil aviation and security to operationalize 1, 2 and 3 above and to authorize, and give specific instructions, mandates and timelines, to relevant organs within the tripartite arrangement to complete the process within the timeline set in 1, 2 and 3
COMESA within the Tripartite
To be determined
5 Strengthen and operationalize the Tripartite as the accepted /designated platform for the implementation of both YD and COMESA legal notice
2015 As above To be determined
6 Expedite the operationalization of the JCA
2014 As above To be determined
7 Harmonize the work of the Tripartite on the implementation of the YD and COMESA Legal Notice with that of the AUC
2014 The Tripartite and AU
To be determined
8 Set up an accurate and reliable air transport statistics observatory
COMESA and AU To be determined
9 Revisit, review and reconsider the wisdom of the continued push to comply and implement the YD and the Legal Notice in their current formulation, and, instead refocus on and popularize the establishment of the single air transport services market and the single air space
As above To be determined
10 Re-evaluate the notion of ownership, effective control and the right of establishment regimes in Africa and COMESA in the context of implementing the YD and COMESA Legal notice
As above To be determined
11 Formulate a white paper or policy document on the establishment of both a single African air transport services market and a single African airspace, to conform with AFCAP
2014 The Tripartite, AFCAC and the AU
To be determined
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Chapter 7
7.0 Conclusions The following are the conclusions;
It is hoped that this study will provide an additional tool in producing an air transport industry in the sub-region and Africa that will contribute effectively to the development and integration of Africa and realizing the COMESA vision of a fully integrated single trade and investment area in which tariff, non-tariff and other impediments to free movement of goods, services and people have been totally removed.
There is no doubt that the success of this integration programme depends
significantly on the ability of transport in general and air transport in particular, to ensure efficient movement of intra-COMESA and extra COMESA trade.
No AU or COMESA member state feels bound or obligated to comply with, and or
implement any or all the provisions of, either the YD or the COMESA Legal Notice No 2. Instead states consider it their right, obligation and duty to choose and select to comply with any, and implement only those provisions they consider to be in their national interest.
It is also clear that many states, stakeholders and key decision makers are getting
fatigued by a continued analysis of the YD and COMESA Legal Notice implementation and compliance evaluation studies.
It may be easier and possible to initiate and bring to a closure the process of
establishing a single air transport services market within (a) the EAC , (b) COMESA (c)!the Tripartite and (c) the AU , done in that order within the third stage of the 6 - stage regional integration timeline set out in the Abuja Treaty.
It is also possible also to bring to a closure, the same process, regarding the
establishment of the single African airspace. Africa can embrace the renewed Jubilee spirit of Pan Africanism and Renaissance
celebrations to break the grid lock of establishing both a single African air transport services market and a single airspace and move forward.
The decisions taken at Yamoussoukro were influenced by the spirit of the
implementation of the Lagos Plan of Action and the Final Act Lagos of 1984 which were and still remain the guiding vision, of a strong and a united Africa, with a single airspace and a single air transport services market.
There is need to revisit the YD and COMESA Legal Notice as originally formulated
and decide whether these are still implementable, in the present reality, where over 22 member states have signed Open Skies Agreements with non-African states, and African airlines entered into global alliances with non-African airlines.
The AU member states perception of sovereignty based on the westphalian model of
nation states will need to be readjusted to the practical reality of 21st century and
40
specifically with regard to the establishment of a single African Air space. Foreign states bidding for access to and control of the African Air Transport Market
have also complicated the scene even more. Finally and perhaps most important is the fact that member states of the AU have
not signed Open Skies Agreements between themselves, but have done so with the USA. This will appear to complicate the possible establishment of both the single African internal air transport services market and the single African airspace. This is an issue needing farther clarification, guidance and direction from the Assembly of the Union.
41
7.1 Annexes and Reference documents
7.1.1 Annexes
7.1.1.1 The AFRAA Annual Report 2012.
7.1.1.2 Report by SAFRO - Collect Consortium on YD implementation.
7.1.1.3 COMESA Legal Notice no 2 of 1999.
7.1.1.4 The Yamoussoukro Decision.
7.1.1.5 The questionnaires that were used in Data Collection
For CAAs
Is your State/Country compliant with COMESA Legal Notice No. 2 of 1999 o Yes o No
If your answer is NO, please give reasons for Non-Compliance Is your State/Country compliant with the Yamoussoukro Decision (YD)? *
o Yes o No
If your answer is NO, please give reasons for Non-Compliance Is your State/Country compliant with African Common Civil Aviation Policy? *
o Yes o No
If your answer is NO, please give reasons for Non-Compliance Name the Designated International Airports in your State/Country. * Please name the Designated Airlines your State/Country. * Please name the City Pairs in your State/Country and the Designated Airlines for
each City Pair * Please give the inter City Pair frequencies per week - passengers only - for the
above city pairs. * Please give the inter City Pair frequencies per week - cargo only - for the above
city pairs. * List of Airlines/Operators with interlining agreements * Please name the Airlines/Operators with code sharing agreements. * List of Airlines/Operators with global alliances such as SkyTeam, Star and
OneWorld * Give the intercity pair cargo rates charged by all cargo operators * Give the intercity pair cargo rates charged by all passenger operators * Please give the volume of Cargo arrivals from COMESA airports per year * Please give the volume of passenger arrivals from COMESA airports per year * Please give the volume of cargo departure to COMESA airports per year. * Please give the volume of passenger departure to COMESA airports per year. * Give the volume of Passengers departing to non COMESA airports per year * Give the volume of Passengers arriving from non COMESA airports per year *
42
Name the airlines that provide scheduled cargo operations within COMESA * Name the airlines that provide non-scheduled cargo operations within COMESA * Give the regulatory or operational constraints that both cargo and passenger
operators face. List the COMESA operators that enjoy 5th and 6th freedom rights in your
State/Country? *
List the city pairs that are serviced by the COMESA 5th and 6th freedom operators and the fare charged *
List the non COMESA operators that enjoy 5th and 6th freedom rights in your State/Country? *
List the city pairs that are serviced by the non COMESA 5th and 6th freedom operators and the fare charged *
List the COMESA airlines that have been refused 5th and 6th freedom traffic rights in your State/Country *
Please give reasons for their refusal *
List the licenced airline franchisees in your State/Country *
What are the competition implications on the operation of the franchisees in your State/Country *
Which months within the year do you experience high passenger traffic in your country? *
Which months within the year do you experience low passenger traffic in your country? *
Do you have different airfare tariffs for low and high traffics? If yes, please give the tariffs for each season. *
List all tourist resorts in your region *
List current and potential tourism circuits in your State/County *
For AFRAA
Name of African airlines that enjoy 4th, 5th and 6th freedom rights within Africa.
Name the city pairs served by the airlines enjoying the above rights. *
Name the African airlines that have been denied 4th, 5th, and 6th freedom rights
in Africa. *
Name the non-African airlines that have been granted 4th, 5th, and 6th freedom
rights in Africa. *
43
Name the city pairs served by the airlines enjoying the above rights. *
Name the African airlines that are in global alliances with (a) SkyTeam (b) Star
and (c) OneWorld *
What is the volume of Intra Africa passenger traffic carried by African airlines per
year *
Name the African airlines that operate from and to Africa. *
Name the non-African airlines who operate to and from Africa *
Name all the scheduled intra African cargo operators in African *
Name all the scheduled cargo operators that operate into and out of Africa. *
Name all the non-scheduled intra African cargo operators in African *
Name the intra Africa city pairs served by above operators and the cargo rates
charged. *
How much do passenger operators charge for intra Africa cargo traffic *
Name the existing and potential hubs in Africa.
Name all the African Tourist resorts
Name all the African Tourist circuits
For AFCAC
What is the Intra Africa volume of passenger traffic carried by African operators per year *
What is the Intra Africa volume of passenger traffic carried by non-African
operators per year *
What are the weekly frequencies served by African airlines between African capitals? *
What are the weekly frequencies served by non-African carriers between African
capitals? *
Name the African operators enjoying 4th, 5th and 6th freedom rights within Africa. *
Name the non-African operators enjoying 4th, 5th and 6th freedom rights within
Africa *
Name the African city pairs with multiple operator designations. *
Name all African cargo operators and the city pairs they serve. *
What are the City pair cargo rates charges by African cargo operators? *
44
What are the City pair cargo rates charges by non-African cargo operators? *
What are the cargo rates charges by both African and non-African cargo operators? *
Name the existing hubs within African.
Name the potential hubs within African.
For ECA
What is the weekly frequency per city pair served by non-African carriers *
What is the Intra Africa percentage volume of passenger traffic carried by African operators *
What is the Intra Africa percentage volume of passenger traffic carried by non-
Africa operators? *
What are the yearly frequencies served by African airlines between African capitals? *
What are the yearly frequencies served by non-African carriers between African
capitals? *
Name the African operators enjoying 4th, 5th and 6th freedom rights within Africa. *
Name the non-African operators enjoying 4th , 5th and 6th freedom rights within
Africa *
Name the African city pairs with multiple operator designations. *
Name all African cargo operators and the city pairs they serve. *
What are the City pair cargo rates charges by African operators? *
What are the City pair cargo rates charges by non-African operators? *
Name the existing hubs within African. *
Name the potential hubs within African.
45
For ACI
What is the volume of intra Africa passenger traffic carried by non-African carriers per year? *
What is the volume of intra Africa cargo traffic carried by non-African carriers per
year? *
Indicate the volume of passenger traffic carried into and out of Africa by African carriers per year. *
Indicate the volume of cargo traffic carried into and out of Africa by African
carriers per year. *
Indicate the volume of passenger traffic carried into and out of Africa by Non-African carriers per year. *
Indicate the volume of cargo traffic carried into and out of Africa by Non-African
carriers per year. *
Name the non-African passenger operators and indicate their weekly frequencies per city pair. *
Name the non-African passenger operators and indicate their weekly frequencies
per city pair. *
Name the African cargo operators and indicate their weekly frequencies per city pair. *
Name the non-African cargo operators and indicate their weekly frequencies per
city pair. *
What are the annual landing fee collections from African operators to and from African airports *
What are the annual landing fee collections from non-African operators from and
to African airports? *
In your view, explain how the intra African air traffic movement can be increased.
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7.1.2 Reference Documents and Materials 1. All reports of COMESA CAA/ AA Meetings from 1998 to 2013. 2. All reports of COMESA Ministers of Transport from 1998 to 2013 3. ECA Reports on air transport liberalization 4. ICAO General Assy resolutions of the liberalization of air transport 31and 34 5. Report by Rexter Ndhlove on COMESA / SADC air transport liberalization 6. Report by Henaku on JCA 7. Reports regarding the implementation of CNS / ATM. 8. Reports of Yamoussoukro Decision Monitoring Body Meetings 9. Reports of AFCAC meetings. 10. The YD Implementation Monitoring Body Reports. 11. Reports from COMESA Tourism Authorities. 12. Report by Dr. Schlumberger 13. The case for the COMESA- EAC - SADC Tripartite Arrangement 14. The 4th , 5th , 6th ICAO Organised Worldwide air transport conference 15. All the ICAO assembly resolutions from 31 to 38. 16. Reports from Ethiopia studies 17. Report if the AFCAC preparatory meeting Dakar, Senegal 25 - 26 July 2013 18. Reports of all COMESA CAA / AA Meetings from 1999 to 2013 19. Reports of all COMESA Ministers responsible for civil aviation 1999 to 2013 20. Reports of all YD implementation Monitoring Body 21. Reports of African Ministers responsible for civil aviation 22. Reports of AFCAC Meeting 1999 to 2013 23. The Constitutive Act of the AU 24. The COMESA treaty 25. The EAC treaty. 26. Modeling the Effects of Air Transport Liberalization on the Airline Industry by Pukar KC. 27. The Economic Effects of Progressive Air Transport Liberalization in Africa By: Megersa
Abera Abate. 28. The economic impacts of air transport liberalization by Grancay, Martin.
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