Meeting of Sustainable Development of Air Transport … · ICAO Meeting on Sustainable Development...
77
ICAO Meeting on Sustainable Development of Air Transport in Africa Antananarivo, Madagascar 25 March 2015 Boubacar Djibo, Director Air Transport Bureau, ICAO 1
Transcript of Meeting of Sustainable Development of Air Transport … · ICAO Meeting on Sustainable Development...
ICAO Meeting on Sustainable Development of Air Transport
in Africa Antananarivo, Madagascar
25 March 2015
Boubacar Djibo, Director Air Transport Bureau, ICAO
1
GLOBAL & AFRICAN PERSPECTIVE: AIR TRANSPORT
2
3
The Air Transport Industry
The air transport industry is not only • a vital engine of global socio-economic growth • but is also of vital importance as a catalyst for
economic development, – creating direct and indirect employment, – supporting tourism and local businesses, and – stimulating foreign investment and international
trade.
-
1,000
2,000
3,000
4,000
5,000
6,00019
45
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
Reve
nue
Pass
enge
r-Ki
lom
etre
s (b
illio
n)
6.1 trillion +5.9% growth rate vs. 2013
Revenue Passenger-Kilometres in 2014*
Wor
ld
rece
ssio
n
Note: world total scheduled services *preliminary figures
Gul
f cris
is
Iran-
Iraq
war
Oil
cris
is
Asi
an c
risis
9/11
terr
oris
t atta
ck
SAR
S
Continuous growth of air traffic
Source: ICAO 4
Economic Benefits of Aviation Worldwide
58.1million
Jobs* supported by aviation worldwide
Source: Air Transport Action Group (ATAG), 2014
$2.4 trillion
Global economic impact*
*including direct, indirect, induced and tourism catalytic 5
in 2012 - Worldwide
Presenter
Presentation Notes
6
Economic Benefits of Travel and Tourism worldwide
In 2012, for the first time of history, there were over 1 billion international arrivals. In 2014, Travel and Tourism… …contributed US$ 7,580 billion in GDP and 277 million jobs in global economy. ...is one of the largest industry in the world, representing 10% of global GDP. During 2015, the industry’s contribution to global GDP is forecast to grow by 3.7% and employment by 2.6%. The Travel and Tourism industry generates one in eleven of all jobs in the world.
Source: World Travel and Tourism Council (WTTC, 2015) and Global Travel Association Coalition (GTAC, 2014)
Travel and Tourism accounts for
10% Total global GDP
Over the next 10 years, travel and tourism will create 80 million new jobs, contribute to the global GDP by 11.4 trillion US$.
Economic Benefits of Aviation Focus on Africa
7million
Jobs* supported by aviation in Africa
Source: Air Transport Action Group (ATAG), 2014
$80 billion
Global economic impact*
*including direct, indirect, induced and tourism catalytic 7
in 2012 - Africa
World Air Transport in 2013 by Region
8
41.5 3.1
22.6 74.0
39.1 5.3
Europe
Africa
Middle East
Asia and Pacific
North America
Latin America and Caribbean
7.9
0.9 1.1
8.6 11.0
2.6
Europe
Africa
Middle East
Asia and Pacific
North America
Latin America and Caribbean
817 73
161 1,008
815 230
Europe
Africa
Middle East
Asia and Pacific
North America
Latin America and Caribbean
1,556 134
500 1,785
1,505
303
Europe
Africa
Middle East
Asia and Pacific
North America
Latin America and Caribbean
Passengers carried (million) Aircraft departures (million)
Revenue Passenger-Kilometres (billion) Freight Tonne-Kilometres (billion)
-0.4%
-0.4% +4.9%
+6.3% -1.3%
+0.4%
+3.1%
+3.5% +7.8%
+8.0% +0.9%
+5.7%
+4.6% +4.4%
+11.2%
+7.7% +2.0%
+6.7%
-0.1% +4.0%
+12.0% +0.2%
-4.9% +2.7%
Scheduled commercial traffic Total (international and domestic) services 8 Source: ICAO Annual Report of the Council 2013
Passenger traffic: Worldwide distribution
2007
Distribution in Revenue Passenger-Kilometres
North America 32%
Asia/ Pacific 29%
Europe 27%
Middle East 6%
Latin America/ Caribbean
4% Africa
2%
Asia/ Pacific 31%
Europe 27%
North America 26%
Middle East 9%
Latin America/ Caribbean
5% Africa
2%
2013 1st: North America 2nd: Asia/Pacific 3rd: Europe
1st: Asia/Pacific 2nd: Europe 3rd: North America
Scheduled commercial traffic Total (international and domestic) services 9 Source: ICAO Annual Reports of the Council
101.4 71.1
46.6 45.5
43.7 38.6 37.8 36.7 36.3
33.9 32.8
27.0 26.6 26.4
24.7
- 25 50 75 100
Johannesburg (JNB)Cairo (CAI)
Lagos (LOS)Nairobi (NBO)
Cape Town (CPT)Dar Es Salaam (DAR) *
Casablanca (CMN)Addis Ababa (ADD)
Algiers (ALG)Port Elizabeth (PLZ)
Tunis (TUN)Maun (MUB)Abuja (ABV)
Zanzibar (ZNZ)Durban (DUR)
Departures (thousand) YoY
22.3 20.4
18.9 12.7
9.2 6.0 6.0
5.1 5.0
3.5 2.1 1.8
1.6 1.4 1.4
- 10 20
South African AirwaysEthiopian Airlines
Egypt AirRoyal Air Maroc
Kenya AirwaysAir Algerie
Air MauritusCOMAIRTunisair
TAAGMangoArik Air
Libyan Arab AirlinesAir Arabia Maroc
Afriqiyah Airways
RPK (billion) YoY
- 1st airline and 1st airport are South African
- Ethiopian Airlines: +20% RPK growth à 2nd largest airline in 2013
Africa Top 15 Airlines - Top 15 Airports in 2013
Note: total (int. and dom.) scheduled services Source: ICAO Form A and ICAO estimates
Note: total (int. and dom.) scheduled and non-scheduled services Source: ACI *ICAO estimate 10
AIRLINES AIRPORTS
- Each airport of the Top 5 recorded a decrease in 2013
- Africa: +4.4% RPK growth in 2013
• The number of seats between Africa and the rest of the world has doubled in 10 years
• 100 million seats were offered by airlines to
travel to/from Africa in 2014
Market Access – Africa and the World
• The share of African carriers decreased from 47 to 40 per cent, between 2005 and 2014.
• In the meantime, the share of Middle-Eastern
carriers increased from 13 to 19 per cent.
Source: OAG, ICAO 11
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
-0.15
-0.1
-0.05
0
0.05
0.1
0.15
2011 2011 2012 2013 2014
EBIT
mar
gin
Net
Pro
fit (U
SD b
illio
n)
African airlines financial results
2013 2014 2015
Net post-tax profit ($ billion) -0.1 0.0 0.2
Per passenger ($) -1.66 0.26 2.51
% revenue -0.8% 0.1% 1.1%
RPK growth (%) 4.4% 1.5% 5.9%
ASK growth (%) 4.3% 2.1% 5.5%
Weight load factor (%) 56.1% 56.1% 55.3%
Break-even load factor (% ATK) 56.3% 55.8% 54.5%
Source: ICAO and IATA (International Air Transport Association)
• African airlines profitability increases, but slowly. • African airlines financial results are characterized by higher yield and lower costs than the average of
the industry. • Few airlines achieve break-even load factor.
12
African airlines fleet renewal is on track
11.5 10
14.8
8.3
12.7
7.7
16.5
10 9
8
0
5
10
15
20
2005 2015
Average age of the fleet
South African Airways Ethiopian Airlines
Kenya Airways Egyptair
Royal Air Maroc
• The average age of the fleet decreased from 2005 to 2015
• Major African airlines started to operate
new generation aircraft adopting the newest technologies such as the Boeing 777 and 787
• Fleet renewal enables airlines to reduce fuel costs and maintenance and therefore operate new profitable routes.
13 Source: ICAO
LCCs in Africa
Number of States with LCC Traffic in Africa
LCC Traffic Intra Africa
• In 2013, 37% of the States in Africa had LCC traffic, 36 percentage points lower than the world average.
• 12 States in Africa had LCC traffic in 2004, the number increased to 20
States in 2013.
• The percentage of States in Africa having LCC traffic grew from 22% in
2004 to 37% in 2013, +15 percentage points. This growth is slightly lower than the world average growth.
• In 2013, 7% of the available seats within Africa were offered by LCCs. This is much lower compared to the world average share of 29%.
• Overall in the intra-Africa market, the number of seats offered by LCCs
increased from 1.4 million in 2004 to 5.9 million in 2013.
• The percentage of seats within Africa offered by LCCs grew from 3% in 2004
to 7% in 2013, +4 percentage points. This is much lower than the world average growth of +10 percentage points.
14 Source: OAG
LCCs in Africa
Source: ICAO
ICAO definition of low-cost carriers
Doc 9626 Manual on the Regulation of International Air Transport ______________________________________________ a low-cost carrier generally refers to an air carrier that has a relatively low-cost structure in comparison with other comparable carriers and offers low fares or rates. Such a carrier may be independent, the division or subsidiary of a major carrier or, in some instances, the ex-charter arm of an airline group. ______________________________________________ transporteur à faibles coûts ou transporteur low-cost désigne généralement un transporteur aérien qui a des coûts relativement bas par rapport à d’autres transporteurs comparables et qui offre des tarifs passagers ou marchandises avantageux. Un tel transporteur peut être indépendant, être une division ou une filiale d’une compagnie majeure ou, dans certains cas, être l’ancienne branche d’exploitation de vols d’affrètement d’un groupe de compagnies aériennes.
A growing number of African LCCs Air Arabia Egypt Air Arabia Maroc Fly540 flyafrica.com Jambojet kulula.com Mango Airlines Fastjet FlySafair Skywise …
States served by an African LCC in 2014
GLOBAL & AFRICAN PERSPECTIVE: AIR CARGO
16
World International Cargo Shipment
Volume of world international cargo shipment
Value of world international cargo shipment
Aviation Aviation
Surface modes
Surface modes
17 Source: Air Transport Action Group (ATAG), 2014
$6.4 trillion One third of the
value of world trade is shipped by air
Presenter
Presentation Notes
While accounting for less than 0.5% of the tonnage of global trade, air freight makes up over a third of the value of international trade. As an important facilitator of international trade, aviation promotes global economic growth and development.
186billion Freight Tonne-Kilometres
+4.0% vs. 2012
41.5 3.1
22.6 74.0
39.1 5.3
Europe
Africa
Middle East
Asia and Pacific
North America
Latin America and Caribbean
Freight Tonne-Kilometres (billion)
-0.1% +4.0%
+12.0% +0.2%
-4.9% +2.7%
Total (international and domestic) services Source: ICAO Annual Report of the Council 2013 Scheduled commercial traffic
World Air Cargo in 2013
ICAO is expecting +4.6 % freight traffic growth in 2014*
* Preliminary result
18
Asia/ Pacific 42%
North America 25%
Europe 23%
Middle East 6%
Latin America/ Caribbean
3% Africa
1%
2007
Distribution in Freight Tonne-Kilometres
1st: Asia/Pacific 2nd: North America 3rd: Europe
1st: Asia/Pacific 2nd: Europe 3rd: North America
2013
Asia/ Pacific 40%
Europe 22%
North America 21%
Middle East 12%
Latin America/ Caribbean
3% Africa
2%
Freight Traffic: Worldwide Distribution
Scheduled commercial traffic Total (international and domestic) services 19 Source: ICAO Annual Reports of the Council
Long-term Air Traffic Forecasts: “GATO” Scheduled Freight Traffic
20 Source: Cir 333, Global Air Transport Outlook to 2030 - GATO
Long-Term Air Traffic Forecasts: “GATO” Africa - Scheduled Freight Traffic
21 Source: Cir 333, Global Air Transport Outlook to 2030 - GATO
Freight traffic (FTK) to/from and within Africa
22
Catalytic impacts of air cargo on the economic development
• Air cargo enables nations, regardless of location, to efficiently connect to distant markets and global supply chains in a speedy, reliable manner.
• Air cargo is a tremendous enabler for economic development in the developing countries. It allows large pools of labor to connect with markets in the developed countries.
• Air transport plays an especially pivotal role for the landlocked countries
Example in Kenya • 90,000 jobs depend on the cut flower industry, generating US$
1 billion in foreign exchange each year. • Good road network between growing areas and Nairobi’s Jomo
Kenyatta airport enables the flowers picked in the morning to reach Amsterdam markets by the evening.
23
ICAO Meeting on Air Cargo Development in Africa
Lomé, Togo 5-7 August 2014
• The meeting was attended by 364 participants • 22 States
Benin, Burkina Faso, Cameroon, Chad, Congo, Côte d’Ivoire, France, Gabon, Gambia, Ghana, Kenya, Mali, Mauritania, Morocco, Niger, Nigeria, Senegal, South Africa, Sudan, Tanzania, Togo, Uganda
• 10 regional and international organizations ACI, AFCAC, AFRAA, ASECNA, ECOWAS, FIATA, IATA, TIACA, WAEMU, WCO
• And 52 private entities
ICAO Meeting on Air Cargo Development in Africa
24
Mid-term review of the implementation of the Lomé Action plan: 2015
Second ICAO Meeting on Air Cargo Development in Africa:
2016 – Addis-Ababa, Ethiopia
http://www.icao.int/Meetings/AirCargoDevelopmentForum-Togo
ICAO Meeting on Air Cargo Development in Africa
Presenter
Presentation Notes
As you can se, as a follow-up to the Lomé Meeting, are the following actions: A mid-term review of the implementation of the Lomé Action plan The Second ICAO Meeting on Air Cargo Development in Africa, which Ethiopia has kindly offered to host in Addis-Ababa in 2016
25
Ebola outbreak impact on air transport in Africa
Airlines have reduced their flight programmes to three States hit by the Ebola outbreak: Guinea, Liberia and Sierra Leone.
The number of seats offered from Guinea, Liberia and Sierra Leone started to decrease in September 2014 and is expected to be -64% lower in March 2015 year-on-year.
SPOTLIGHT:
MADAGASCAR
26
Economic Indicators: Madagascar
27
- Madagascar's sources of growth are tourism, agriculture and the extractive industries. Tourism focuses on the niche eco-tourism market, capitalizing on Madagascar's unique biodiversity, unspoiled natural habitats, national parks and lemur species.
- Agriculture, including fishing and forestry, is a
mainstay of the economy, accounting for more than one-fourth of GDP and employing 80% of the population.
Presenter
Presentation Notes
- Real GDP increased by 1.9% annually during the past five years and is expected to grow by 4.3% during the next 5 years.
Economic Indicators: Madagascar
• Identification of 3 levels of connectivity • Key driver of sustainable development for
islands • Connectivity of islands is essential for tourism • Tourism and transport policies must be
coordinated
local
regional
global
Source: OAG 28
Economic Indicators: Madagascar
29
Presenter
Presentation Notes
- Madagascar's sources of growth are tourism, agriculture and the extractive industries. Tourism focuses on the niche eco-tourism market, capitalizing on Madagascar's unique biodiversity, unspoiled natural habitats, national parks and lemur species. - Agriculture, including fishing and forestry, is a mainstay of the economy, accounting for more than one-fourth of GDP and employing 80% of the population. - The State's imports are 19% larger in trade value than its exports in 2014. - Exports of apparel boomed in recent years primarily due to duty-free access to the US; however, Madagascar's failure to comply with the requirements of the African Growth and Opportunity Act (AGOA) led to the termination of the State's duty-free access in January 2010. - Main export commodities include coffee, vanilla, shellfish, sugar, cotton cloth, clothing, chromite, petroleum products. - The State's main export partners include: France, Germany, China, Canada, and the United States
Aviation Indicators: Madagascar
30
3.8% 7.7%
-23.1%
7.0%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
0
10,000
20,000
30,000
2010 2011 2012 2013 2014
Mov
emen
ts
domestic international growth
Aircraft movements in Madagascar airports
Source: ACM, ICAO
Top 10 cities by departure in Africa in 2014
Presenter
Presentation Notes
- 67% of departures are domestic flights, exclusively flown by State's AOC holders. 19% are international flights to Europe, 13% are within Africa, and 1% are to Asia/Pacific. - 79% of the worldwide departures from the State are performed by the State's AOC holder.
Aviation Indicators: Madagascar
31 Source: ICAO
Top 10 airlines in Africa in 2014 by capacity
Presenter
Presentation Notes
- During the past 5 years, the State's operator traffic has grown at an annual average rate of 12.5%. In 2014, over 80% of the State's operator traffic is international in terms of RPKs. - Air Madagascar is the flag carrier of the State. It operates services to Europe, Asia and neighbouring African and Indian Ocean island destinations. It also operates an extensive domestic network.
8.1% 7.4%
-7.2%
1.1%
-10%
-5%
0%
5%
10%
0
200
400
600
800
1000
1200
1400
1600
2010 2011 2012 2013 2014
Pass
enge
rs (0
00)
domestic international growth
Aviation Indicators: Madagascar
Passenger traffic in Madagascar airports
Source: CAM 32
CONNECTIVITY: AN IMPORTANT VALUE CHAIN TO STIMULATE AIR
TRANSPORT DEVELOPMENT
33
Movement of passengers, mail and cargo involving the minimum of transit points
• which makes trip as short as possible
• with optimal user satisfaction
• at the minimum price possible
Definition of Connectivity in Air Transport
34
Connectivity
Market access
Airline activities
Inter- modality
Facilitation* Optimal use
of airport systems
Optimal use of aircraft
Optimal use of ANS
(ASBUs)
In order to optimize connectivity a strong supporting framework is needed
This includes: • market access (e.g. liberalization) • optimal use of:
− air navigations services (incl. ASBUs) − Aircraft − airport systems − facilitation and security
• intermodality • airline activities
*Border control optimization and fastest security clearance
Connectivity Components
35
The supporting regulatory framework:
ICAO’s
contribution to connectivity
Supporting regulatory framework
Market access
Taxes
Charges
Air carrier ownership & control
ASBUs
Facilitation/ Security
Consumer protection
Fair competition
PO
LICIE
S G
UID
AN
CE
The Supporting Regulatory Framework: ICAO’s Contribution to Connectivity
36
• Market access liberalization: international agreements (including for cargo services)
• Air carrier ownership and control: international agreement to liberalize
the current restrictions
• Aviation system block upgrades (ASBUs): improved access, better utilization of available capacity, reduced fuel burn
• Facilitation: need smooth transit through air transport system for passengers and cargo
ICAO Activities Supporting Connectivity Part 1
37
• Consumer protection: ICAO to foster regulatory convergence through core principles (incl. price transparency)
• Fair competition: ICAO to facilitate exchange of best practices ICAO (ICAN competition seminar) and facilitate comparison between national and regional competition policies/practices (compendium)
• User charges key principles – cost-relatedness, transparency, consultation with users, non-discrimination
• Taxation in line with ICAO policies – «Not to kill the goose that lays the golden eggs»
ICAO Activities Supporting Connectivity Part 2
38
FREEDOMS OF THE AIR
YD = Yamoussoukro Decision EU = European Union
ICAN ICAO Air Services
Negotiation Event
Market Access – Supporting Framework
Market Access
Traffic liberalization (Pax and cargo)
Multilaterals
Bilaterals
Regional framework Regional approaches
(e.g. EU, YD)
39
Ø Improve efficiency of negotiations Ø A place to meet for multiple ASA talks Ø A forum to get info, discuss issues Ø A platform for bilateral, multilateral talks
Ø Save time and money for States
ICAN Benefits
40
Venue Year Dubai, UA 2008
Istanbul, Turkey 2009
Kingston, Jamaica 2010
Mumbai, India 2011
Jeddah, Saudi Arabia 2012
Durban, South Africa 2013
Bali, Indonesia 2014
Number of participating States 27 52 39 65 62 73 78
Number of bilateral meetings held 100 200 200 340 350 485 550
Number of agreements and
arrangements signed 20 60 60 120 130 458 500
ICAN/2015: Antalya, Turkey ICAN/2016: Latin America
ICAN –States’ Participation by Region
41
8 10 10
16 19
29
22
5
10
5
13 14 13
18
7
21
5
19
12 14
19
6 8
5
10 12
7
11
1 3
14
7 5
10 8
0
5
10
15
20
25
30
35
Dubai, UAE2008
Istanbul, Turkey2009
Kingston, Jamaica2010
Mumbai, India2011
Jeddah, SaudiArabia2012
Durban, SouthAfrica2013
Bali, Indonesia2014
Number of AfricanStates
Number ofAsia/Pacific States
Number of EuropeanStates
Number of MiddleEastern States
Number of AmericanStates (incl. NA)
ICAN 2015 Antalya, Turkey (19-23 October 2015)
42
ICAN website http://www.icao.int/Meetings/ICAN2015
None recorded
25 or more not recorded
11 – 24 not recorded
10 or less not recorded
All recorded
No data
Source: ICAO etools - WASA Map www.icao.int/etools
Non-registered agreements and arrangements
no agreement or arrangement recorded in the WASA database
Registration of air services agreements by ICAO
Connectivity brings concrete value ð main purpose of air transport If conditions are met: • good end-user experience • more travel • more economic development • and hence more traffic growth
Market access ð Connectivity ð Economic development
Connectivity is in line with Chicago Convention Preamble
Art. 44
Value of Connectivity Concept
44
• World Bank
Indicator on Air Transport Connectivity (ACI)
• WTO / WCO / TIACA / FIATA
Logistics Performance Index for Cargo Connectivity
• UNWTO / WTTC
Joint Statement “Hand in Hand for Sustainability”
Air Transport and Tourism Partnering for Economic Development
46
INFRASTRUCTURE MANAGEMENT
47
4 key charging principles – Non-discrimination – Cost relatedness – Transparency – Consultation with users
ICAO’s Doc 9082 – ICAO’s Policies on Charges for Airports and Air Navigation Services
Charging Principles
48
Presenter
Presentation Notes
Doc 9082 differs in status from the Convention in that Contracting States are not bound to adhere to its provisions and recommendations. However, because of the widespread endorsement of the policies therein by worldwide economic conferences, the Council, and Assembly Resolutions, and their practical value in avoiding discrimination and potential disputes, there is a strong moral obligation for States to ensure that the cost recovery practices of their airports conform to the policies and philosophy set out in Doc 9082. Indeed, the Council of ICAO strongly encourages States to apply ICAO’s policies on charges for airports and air navigation services (paragraph 1 of Section I of Doc 9082 refers). Further, as per a recommendation adopted by the Conference on the Economics of Airports and Air Navigation Services (CEANS 2008) and endorsed by the ICAO Council, States are encouraged to incorporate the four key charging principles of non-discrimination, cost-relatedness, transparency and consultation with users into their national legislation, regulations or policies, as well as into their air services agreements, in order to ensure compliance by airport operators and ANSPs (paragraph 1 of the Foreword to Doc 9082 refers).
• A charge is a levy that is designed and applied specifically to recover the costs of providing facilities and services for civil aviation
• A tax is a levy that is designed to raise national or local government revenues, which are generally not applied to civil aviation in their entirety or on a cost-specific basis.
ICAO’s Doc 9562– Airport Economics Manual
Charges vs. Taxes
49
• Users shall ultimately bear their full and fair share of the cost of providing the airport.
• Cost to be allocated is the full cost of providing the airport and its ancillary services, including appropriate amounts for cost of capital and depreciation of assets, as well as the costs of maintenance, operation, management and administration.
• Consistent with the form of economic oversight adopted, these costs may be offset by non-aeronautical revenues.
ICAO’s Doc 9562– Airport Economics Manual
Cost Basis for Airport Charges
50
• Government ownership • Management contract • Lease or concession • Transfer of minority ownership • Public-private partnerships • Private sector ownership and control
ICAO’s Doc 9562– Airport Economics Manual
Ownership and Management Options
51
Presenter
Presentation Notes
Private participation and private involvement, which are synonyms, mean that the private sector has a role in the ownership, control and/or management of an airport entity while majority or ultimate ownership remains with the government. Private participation/involvement that can be used for airport management and operation sometimes involves the establishment of a public-private partnership (PPP). The advantage of a PPP is that the management skills and financial acumen of private businesses could create better value for money for taxpayers, when proper cooperative arrangements between the public and private sectors are used. Private participation/involvement has basically four different forms: management contract, lease (which is sometimes called concession), transfer of minority ownership, and private sector ownership and/or operation of parts of the activities of an airport (including PPP schemes).
• When considering the commercialization or privatization of airports, States should bear in mind that they are ultimately responsible for safety, security and economic oversight of these entities.
ICAO’s Doc 9082 – ICAO’s Policies on Charges for Airports and Air Navigation Services
Commercialization or Privatization
52
• States should ensure that the policies are followed by relevant authorities in charge of taxation so as to avoid imposing discriminatory taxes on international aviation which may have a negative effect on the competitiveness of the aviation industry and impact States’ national economies (Recommendation 2.6/1 of AT-Conf/6 refers)
• Part of the resolutions of the 45th Annual General Assembly of the African
Airlines Association (AFRAA): “African governments should reduce taxes, charges and fees especially those related to fuel and passengers, and to avoid imposing airport development levies on passengers”
Impact of Taxation on Air Transport Sustainability
53
• Assembly Resolution A38-14 (Appendix D): “it is a matter of great concern that taxes are increasingly being imposed by some Member States in respect of certain aspects of international air transport…”
• Member States urged to follow ICAO Policies on Taxation (Doc 8632):
“Each Contracting State shall reduce to the fullest practicable extent and make plans to eliminate as soon as its economic conditions permit all forms of taxation on the sale or use of international air transport”
Impact of Taxation on Air Transport Sustainability
54
Economic oversight • Minimize the risk of anti-competitive practices or abusing
any dominant position • Ensure non-discrimination and transparency in the
application of charges • Investments in capacity meet current and future demand
in a cost-effective manner • Protect the interests of passengers and other end-users
è To achieve a balance between the interests of airports and those public policy objectives
ICAO’s Doc 9082 – ICAO’s Policies on Charges for Airports and Air Navigation Services
Economic Oversight
55
Presenter
Presentation Notes
States’ exercise of their economic oversight responsibilities should be clearly separated from the operation and provision of airports and air navigation services, with roles and powers clearly defined for each function. Economic oversight is defined as the function by which a State supervises the commercial and operational practices of an airport. The main purpose of economic oversight should be to achieve a balance between the interests of airports, including government-operated providers, and those public policy objectives that include, but are not limited to, the following: i) Minimize the risk of airports engaging in anti-competitive practices or abusing any dominant position they may have; ii) Ensure non-discrimination and transparency in the application of charges; iii) Ascertain that investments in capacity meet current and future demand in a cost-effective manner; and iv) Protect the interests of passengers and other end-users. To promote these objectives, consistent with the form of economic oversight adopted, States should ensure that airports consult with users and that appropriate performance management systems are in place. States should adopt an approach to economic oversight that meets their specific circumstances. The degree of competition between providers, the costs and benefits of different forms of oversight, as well as the legal, institutional and governance frameworks should be taken into consideration when selecting the appropriate approach. Regulatory interventions should be used only when required and kept to a minimum. States should consider adopting a regional approach to economic oversight where individual States lack the adequate capacity to perform their economic oversight responsibilities.
From light-handed to more robust approaches: • Competition law • Fall-back regulation (or “market regulation”) • Institutional requirements (or “checks and balances”) • Price cap regulation (or “incentive-based” regulation) • Rate of return regulation (or “cost of service”, or “cost plus”
regulation)
ICAO’s policies on the issue are quite flexible for the application by States/Regulators according to local circumstances, in particular the degree of competition.
ICAO’s Doc 9082 – ICAO’s Policies on Charges for Airports and Air Navigation Services
Forms of Economic Oversight
56
Presenter
Presentation Notes
In performing its economic oversight function, a State should, in particular, ensure that airports consult with users and that appropriate performance management systems are in place. When goods and services are supplied by competitors vying for customers, the economic well-being of consumers can often be left in the hands of market forces, which act as an “automatic regulator” for ensuring efficiency in setting prices and establishing the quantity and quality of supply. By contrast, when supply in a given market is dominated by a single provider, the question of regulatory intervention becomes a public concern. Commercialization and privatization have been bringing more competition and commercial pressure on airports. Competition between airports may arise in varying circumstances, for example, - long-haul hubs competing for origin-destination and transfer traffic; - multiple airports in large conurbations owned and/or operated by separate entities competing in the same market; - smaller non-proximate airports actively competing to attract point-to-point, short-haul services, particularly those offered by low-cost carriers (LCCs). However, this does not imply any changes to the responsibility of States regarding economic oversight, although it is likely to impact on which model of oversight the State may deem to be most appropriate. The market conditions and the degrees of competition are not uniform. Even in competitive markets, the focus by airports on competition and cost reduction may sometimes negatively affect the interests of certain categories of users. Furthermore, commercialization and privatization may have reduced the awareness of, and adherence by airports to, States’ international obligations including ICAO’s policies on charges. These responsibilities can only be assumed by the State itself.
It is recommended that, with the exception of concessions that are directly associated with the operation of air transport services, such as fuel, in-flight catering and ground handling,
non-aeronautical revenues be fully developed, while keeping in mind the interests and needs of passengers and the public, and ensuring terminal efficiency
ICAO’s Doc 9082 – ICAO’s Policies on Charges for Airports and Air Navigation Services
Non-Aeronautical Activities
57
The scope may be widened to include other areas of safety oversight, such as the certification and surveillance of aerodromes and air navigation facilities and even security oversight (Doc 9734)
Examples:
– The East African Community Civil Aviation Safety and Security Oversight Agency (CASSOA) – The West African Economic and Monetary Union (UEMOA) agreed in October 2013 on the creation of
a West African Community Civil Aviation Safety and Security Oversight Agency
Sustainable Funding of Regional Safety Oversight Organizations
Safety: Regional Safety Oversight Organizations (RSOOs) Additional guidance was developed on funding of safety oversight function at the regional level and included in Chapter 5 of Safety Oversight Manual (Doc 9734)
– Based on ICAO’s policies in Doc 9082, air safety charges would recover the RSOO’s cost of providing certain safety oversight services
– Strict safeguards should be in place before the implementation of any air safety charge
Security
58
Financing Aviation Safety Block Upgrades (ASBUs)
• AT-Conf/6* (Recommendation 2.7/1 b)) - Establish a multi-disciplinary working group to: – consider the challenges associated with the establishment of operational
and economic incentives – allow early benefits of new technologies and procedures - ASBUs modules
• Multidisciplinary Working Group / ASBU/1 met in February 2014 – Creation of 4 ad-how sub-working groups – The report has been presented at MDWG/ASBU/2 in February 2015
59
FUNDING AND FINANCING CHALLENGES IN AFRICA
60
Africa Air Transport Challenges
• Serious difficulties of development, including: – safety and security challenges, – difficulty of many airlines, airports and ANSPs to
adequately access funds for the modernization and expansion of their infrastructure.
• While many infrastructure financing initiatives are
currently taking place in various African States, progress remains generally below expectation.
61
Africa Air Transport Challenges
• For the development of civil aviation in the Region, African States should give priority to tackling obstacles such as: – the slow pace of implementation of the Yamoussoukro
Decision (YD) leading to loss of market share for African airlines,
– inadequate airport and air navigation infrastructure, and – unjustified charges and taxes.
62
African States, their airports and ANSPs should – consider using the existing ICAO mechanisms – explore other possible mechanisms
that could assist them to finance their infrastructure projects. They should also vigorously explore generation of revenues from non-aeronautical sources.
Africa - Recommended Practices
63
However,
significant efforts should be pursued in order to implement CEANS recommendations, especially with regard to economic performance and consultation with users.
Effective Implementation of CEANS Recommendations in Africa
10% 30% 50% 70%
Economic Oversight
Economic Performance
Consultation with Users
Adherence to Policies
Four Principles in Laws
Four Principles in ASAs
Airports
ANSPs
CEANS: Conference on the Economics of Airports and Air Navigation Services
The majority of reporting States in Africa adhere to ICAO’s policies on charges in Doc 9082
64
Airport Infrastructure in Africa Funding Issues
• There is difficulty of many airports in Africa to adequately access funds for the modernization and expansion of their infrastructure
• Revenues generated by the civil aviation sector should be re-invested in this sector in accordance with ICAO’s policies on charges (Doc 9082, ICAO’s Policies on Charges for Airports and Air Navigation Services)
• Regional cooperation and integration should be explored as the best way to secure cost-effective investments and achieve better returns
• Issues related to management and operations of airports that are not economically viable
65
Air Navigation Services Infrastructure in Africa - Funding Issues
• There is difficulty of many ANSPs in Africa to adequately access funds for the modernization and expansion of their infrastructure
• Revenues generated by the civil aviation sector should be re-invested in this sector in accordance with ICAO’s policies on charges (Doc 9082)
• Regional cooperation and integration should be explored as the best way to secure cost-effective investments and achieve better returns
66
African Union Financing the AU Functioning System
21st Assembly ordinary session of the African Union (AU) - May 2013
Objectives: accelerate Africa’s infrastructural development, to link African peoples, countries and economies; and help to drive social, cultural and economic development.
Outcome: The Assembly requested the AU Commission to submit the Report of the Ordinary Session to the Conference of Ministers of Finance and Economic Planning for their urgent consideration and concrete proposals of financing and implantation modalities of different options proposed.
ICAO’s concern: One of the option considered to finance the AU functioning system is to establish a tax on air tickets.
- This tax is against ICAO policies on taxation (Doc 8632) - The financial needs for civil aviation development in Africa are not yet covered
Therefore, ICAO is requesting to be associated to the coming discussions on this issue.
67
Africa: 19
Europe: 11 + EU
Asia Pacific: 18
Latin America: 7
North America: 2 Middle East: 6
Cape Town Convention
Member Countries (incl. aircraft protocol) European Union (incl aircraft protocol) Member Countries (no protocols)
Member Country (incl both protocols) ratification also covered by European Union
Status of Ratification (as of Feb 2015)
Luxembourg
68
Presenter
Presentation Notes
As of October 2014, the aircraft Protocol of the Cape Town Convention has 56 contracting States The membership of the EU as a regional organization covers its Member States only as far as it has competency over subjects of the convention/protocol. It is therefore not applicable to Denmark (incl. Greenland), who has opted out of the provisions conferring powers on the European Community to ratify international treaties on behalf of the Member States. Luxembourg had already ratified the treaty individually, and is additionally covered by the EU’s accession to it. Vietnam is the latest State to join the protocol, with having it ratified in September this year and entering into force by January 2015. Especially very low representation of contracting states in Africa, which prevents the facilitation of leasing and the further development of air transport on the continent.
Main reasons for ratification by States
- Legal advantages • new uniform international regimen governing the taking of security in high-value mobile equipment, based on the creation
of an international interest • improve predictability as to the enforceability of security, title reservation and leasing rights in aircraft objects
- Economic advantage
• provide confidence to lenders and institutional investors • attract domestic and foreign capital • improve opportunities for asset-based financing of high-value aircraft equipment reduce risks for creditors and
consequently borrowing costs for debtors • improved safety by assisting airlines in many jurisdictions in their efforts to modernize and upgrade their fleet • Reduce fuel and maintenance costs by having a more fuel efficient fleet
- Environment advantage
• Improve the fuel efficiency of the fleet and reduce the emissions of greenhouse effect gases
Ratification
69
Strategic Objective: Economic Development How ICAO is assisting Africa
• Provision of data and analytical support • Forecasting support through Traffic Forecasting Group (Africa and Indian Ocean traffic
forecasting group met in Nairobi in August 2013) and Global Forecasts • Global and Regional 20-Year Forecasts: Pilots, Maintenance Personnel, Air Traffic
Controllers (Doc 9956) • Expert guidance provided on request ([email protected]) • Ongoing work on the recommendation of the last Air Transport Regulation Panel (ATRP) • eTools and Cost-Benefit Analysis will be updated to facilitate the work of PIRGs (Planning
and Implementation Regional Groups) • Ongoing work with ASECNA to determine efficiency of ATM system based on radar track
data given by ASECNA
70
With the support of 3 ICAO Regional Offices located in Africa: Cairo, Dakar and Nairobi
ICAO DATA MANAGEMENT
71
Member States ICAO Statistics Programme
(Air Transport Reporting Forms)
Collection, Verification
72
Enterprise Data Management (EDM)
External data sources
Business Analysis Tools ICORAS, ICAO Data Plus etc.
Plus data on Environment, Safety, Air Navigation etc.
73
Enterprise Data Management (EDM)
Benefits for Council and States
• Availability of a powerful platform for harmonized and comprehensive data relevant for Council and States for strategic planning and decision making
• Easy access to large time series of data with interactive functionality
• Visual analytics which facilitates States’ decision making, covering all aspects of air transport
• Least expensive costs with latest technology and cloud-based infrastructure
74
Demonstration of Business Analysis Tools
Access through ICAO eTOOLS Website www4.icao.int/etools
• Distribute free “authorization codes” to Council members, Member States and Secretariat on a regular basis
• Business Analysis Tools currently available: – International traffic mapping and data tool – Air services agreement (WASA) visualization – Aeronautical treaty map – iStars applications (integrated)
75
International traffic mapping and data tool
Demonstration of Business Analysis Tools
76
Air services agreement (WASA) visualization
Demonstration of Business Analysis Tools
More information available at: www.icao.int
Thank you
Merci 谢谢 شكرا
Gracias спасибо
77
