The International Air Transport Association (IATA) has called on governments to begin repatriating blocked airline funds following a 25% increase since June. The combined total owed currently sits at almost $2 billion, divided across 27 countries.

$1.2 billion trapped in five nations

In a statement released on Wednesday, the IATA warned about the skyrocketing amount of trapped funds as governments attempt to pad the impact of currency crises. Across the past six months, the figure has increased by almost $400 million to $2 billion, with over 60% of the blocked amount attributed to just five countries: Nigeria, Pakistan, Bangladesh, Lebanon, and Algeria.

IATA Director General Willie Walsh cautioned the nations with outstanding debts to airlines, citing compliance with respective international agreements and obligations.

“Preventing airlines from repatriating funds may appear to be an easy way to shore up depleted treasuries, but ultimately the local economy will pay a high price. No business can sustain providing service if they cannot get paid and this is no different for airlines. Air links are a vital economic catalyst. Enabling the efficient repatriation of revenues is a critical for any economy to remain globally connected to markets and supply chain.”

Currency crises

Nigeria is the highest debtor named by the IATA, with coverage of the crisis seeing significant coverage through summer and autumn. The debt notably became the subject of an ongoing feud between the government and Dubai-based Emirates. Last month, the airline withdrew from operations in the West African nation after continued delays in repatriating its revenue.

In September, Nigeria announced it would begin fining carriers that did not sell tickets in naira amid its ongoing international currency crisis, inflating total blocked funds to almost $700 million in late October. Although $551 million is still pending repatriation, Kamil Al-Awadhi, IATA Regional Vice President for Africa and the Middle East, praised the country’s collaborative and constructive work to begin resolving the issue despite difficult circumstances and release $120 million in November. A further release is expected by the end of the year.

Pakistan trailed behind Nigeria, with $225 million owed. While no formal currency crisis has been declared, economists at Bloomberg have warned of a sharp increase in its probability through 2023 after the country sought to ease conditions for the $1.1 billion International Monetary Fund (IMF) loan provided in August.

Bangladesh, Lebanon, and Algeria round out the top five, owing $208 million, $133 million, and $140 million, respectively.

Returning to Venezuela

Outside of the $2 billion owed, the IATA has turned its eyes to Venezuela, which racked up $3.8 billion in airline debt during a prolonged period of hyperinflation, political instability, and international sanctions. The government has blocked the repatriation of airline funds since 2016, leading to international air traffic into Venezuela dropping by 62% between 2016 and 2019.

Since 2021, the country has made significant headway in bolstering its economy, recording 17.04% year-on-year economic growth during the first financial quarter of 2022. Several carriers, including TAP Air Portugal, LATAM, and Avianca, have already resumed flights to Venezuela as the country moves to promote its tourism market.

While several governments remain unconvinced of the country’s stability and continue to advise against travel, Venezuela has notably seen an uptick in arrivals from Russian holidaymakers seeking “friendly” destinations. Nordwind Airlines relaunched direct services between Moscow Sheremetyevo (SVO) and Margarita (PMV) on October 2, welcoming 3,000 tourists to the resort island during October and November. A recently assigned agreement between both countries could see a potential 100,000 Russian holidaymakers visit the country before the end of the year.

Source: Simple Flying

After minimal progress since its launch in January 2018, the Single African Air Transport Market (SAATM) appeared to reach a decision this week with 15 of the 35 signatory states launching a cluster to pilot the scheme in real life.

The announcement is a major boost to the proposed joint airline by Kenya Airways and South African Airways, which will have immediate and unlimited access to key markets on the continent as both countries will be participating in the trial runs.

It is also a signature achievement for the International Air Transport Association (IATA), which has been working behind the scenes to get SAATM off the ground in 2023.

Dubbed the SAATM Pilot Implementation Project, the landmark decision – which bands together some of Africa’s more significant air transport markets – was announced on November 14 by the African Civil Aviation Commission (AFCAC). 

Meeting in Dakar, Senegal, to mark the 23rd anniversary of the Yamoussoukro Decision, ministers from Kenya, Ethiopia, Rwanda, South Africa, Cape Verde, Côte d’Ivoire, Cameroon, Ghana, Morocco, Mozambique, Namibia, Nigeria, Senegal, Togo and Zambia, agreed to launch SAATM flights between their territories.

Align agreements to SAATM

The 15 states are expected to cement their decision further by aligning their respective air service agreements to the SAATM regime when they again meet during this year’s International Civil Aviation Organisation (ICAO) Air Services Negotiation in Abuja on December 5.

According to the African Civil Aviation Commission, the pilot markets were selected based on their willingness to participate and possession of key enablers for fully liberalised skies on the continent.

The benefits

According to a recent study by the African Union on the potential benefits of SAATM implementation, the continent would gain an additional $4.2 billion in GDP, 596,000 new jobs and a 27 percent reduction in air fares.

“The study also assessed the level of the Yamoussoukro Decision (YD) implementation and the efficacy of SAATM operationalisation for each member state and arrived at a “preparedness” rating using the SAATM enablers. These 15 states met the favourable environment for successful SAATM implementation,” AFCAC says.

The commission says 35 member states have committed to unconditionally implement SAATM while 21 states have signed the memorandum of implementation for its operationalisation.

The 35 states are estimated to account for over 85 percent of intra-African traffic and over 800 million of Africa’s 1.2 billion population.

Although SAATM’s predecessor, the Yamoussoukro Decision, has theoretically been in force since July 2000 when African heads of state and government endorsed it during their meeting in Lomé, Togo, African skies have remained largely closed, with countries opting for bilateral air services agreements.

Improve connectivity

The major objective of the Yamoussoukro Decision was to improve connectivity and integration of Africa through liberalisation of scheduled and non-scheduled air transport services and removing all restrictions on traffic rights, capacity and frequency between city pairs for all African airlines. But the continent has struggled to actualise it.

AFCAC Secretary General Adefunke Adeyemi says the commission is now expecting member states to align their respective air service agreements and for eligible airlines to begin to expand operations across the continent.

“The launch of SAATM as the first flagship project of the AU Agenda 2063 on January 28, 2018, is considered as a turning point towards the full liberalisation of air transport market on the continent,” Adeyemi said.

The pilot is expected to demonstrate the benefits and build the confidence of bystanders to fully open their air transport markets.

“With the unveiling of this pilot project of ready and willing African states that have requisite SAATM implementation enablers and with the overall benefits associated with the liberalisation of the African air transport through the YD, including air transport’s contribution to the AFCFTA to facilitate intra-African trade, this will elicit the commitment of member states that have not yet signed the Solemn Commitment to sign up,” Adeyemi added.

Lift African aviation traffic

Speaking on the side-lines of Aviation Africa 2022 summit in Kigali in September, IATA vice president for Africa and the Middle-east Kamil Al Awadi said he had committed the bulk of his resources for 2023 to getting SAATM off the ground and lifting African aviation traffic to at least three percent of the global total.

Opening up intra-African air travel and connectivity would not only boost domestic air traffic but have a knock-on effect on international traffic as well, he says.

At only 1.9 percent of global traffic in 2019, Africa’s aviation contributed $63 billion to the continent’s GDP and 7.7 million jobs, half a million of them direct.

“I want to see these numbers next year jumping a percent at least. If it goes up it means we are going the right direction; if it goes down, we are going the wrong direction.

“IATA is going to pour as much resources as it can afford into the region to get it up and running,” he says.

Kamil says given Africa’s population and resources, the continent’s share of global aviation should be closer to 15 percent.

Build consensus

His plan revolves around getting at least 15 countries to build consensus around the problems and fears that are holding back liberalisation of the air traffic market, and to come up with a corrective plan of action.

The conversation will revolve around demonstrating to participants how removing constraints to travel such as capacity caps and reducing taxes on the industry can boost traffic and result in a much better overall picture.

“Every trip I make into Africa, I can’t get into any country directly; I have to go through another country. It is a continent that is so disconnected that it is easier to jump out and then back in to make it to the country next door,” Kamil said.

“I am pushing and hopefully by January 2023, we are starting to push all stakeholders with the intention to first of all get some routes open internally so that you can move within African easily.”

Source: The East African

Participating in a round table of Heads of State, Prime Ministers and Chiefs of International Organizations during COP 27, ICAO Council President Salvatore Sciacchitano advocated for the realization of the ICAO Assembly’s decision to reach net zero emissions from air transport by 2050.

“Achieving net-zero carbon emissions by 2050 will require substantial and sustained investment and financing over the coming decades. We must furthermore assure reliable and affordable support and capacity-building for the many developing countries and States with particular needs, who will be depending on it to help play their part,” Mr. Sciacchitano said. “An important part of my message to you here today is that the work to begin addressing these objectives for our sector has already started.”

This goal is to be achieved collectively, without attribution of specific obligations or commitments in the form of emission reduction goals to individual States. One of the key features of the agreement is the recognition that each State’s special circumstances and respective capabilities will inform each State’s ability to contribute, and within its own national timeframe.

“ICAO is fully cognizant of its global responsibilities towards the sustainable future of the international aviation sector, and of the planet. We also remain deeply cognizant of the critical importance of international air connectivity to the civil societies and economies of Small Island Developing States, Landlocked Developing Countries, and Least Developed Countries,” remarked the Council President. “As aviation continues to explore and adopt the incredible new technological innovations arising today in aeronautics and renewable energy propulsion, ICAO also recognizes how imperative it is to start putting in place the right policies, legal frameworks and modernized infrastructure to enable this evolution to emissions-free flight.”

For example, ICAO launched its Assistance, Capacity-building and Training for Sustainable Aviation Fuels (ACT-SAF) programme in June. It will provide tailored support to States on sustainable fuel development and deployment, and facilitate related partnerships and cooperation around the world. An increasing number of States and international organizations are becoming actively involved in this programme, which recognizes the key role to be played in this endeavour by sustainable fuels, and we expect many more States and organizations to join in the coming months.

To reduce the impacts of aviation on the global climate, States, the industry, and all other relevant stakeholders have in fact been pursuing a basket of CO2 reduction measures through ICAO for many years now. This contributed to modern aircraft being 70% quieter and 80% more fuel-efficient than their early predecessors.

The introduction of radical, disruptive, and in many cases revolutionary innovations in technologies and operations is now required to deliver the overall decarbonization needed to keep global temperatures in check.

“This transition, fuelled by frontier technologies and featuring many new entrants to the aviation ecosystem, holds tremendous economic potential for developing States. We are greatly encouraged at ICAO that it can also help establish a more level playing field toward an inclusive and effective global green transition in aviation in the coming decades,” Mr Sciacchitano said. “We will be proud to leverage our 78 year history of driving international consensus and progress in air transport to assure that this is realized.”

In the immediate term, ICAO Member States and industry will continue pursuing additional sustainability objectives, notably through the aforementioned expanded use of sustainable aviation fuels and the ongoing implementation of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

Source: Travel Daily News

Throughout the summer, we saw scenes depicting long delays, cancellations, and frustrated passengers unfold at airports across the globe. Staffing challenges, Covid-related issues, and extremely high consumer demand all played a role in the chaos. The fact that many airlines run on outdated technology systems that are siloed across operations and lack powerful analytics tools only makes matters more challenging.

“Some of the technology, software, and systems used today are aged 30-plus years,” said Catalin Sava, IBM’s chief technology officer for travel and transportation.

Even before the pandemic, there was an urgent need for airlines to modernize their technology systems and usher in a new era of efficiency, customer-centric operations, and digital insights. However, industry shifts brought on by the pandemic have demonstrated that doing so is now critical. Airlines are in need of cloud transformation, which can improve everything from daily operations and maintenance challenges to long-term goals like carbon footprint reduction.

React to Market Changes as They Happen

Legacy systems lock airline operations into a near-static profile of capability and scalability — but this pattern is not fit for today’s business environment. As with all digital business, airlines need to have the ability to react to market dynamics in real-time, allowing them to tune their operations to fit demand. With the adoption of cloud native solutions, deployment of new services goes from years to weeks, producing massive development savings and embracing a software development culture built on relevance and customer centricity.

Cloud native solutions enable the shift from capital expenditures to operational expenditures for IT operations and add the ability to dynamically scale, both horizontally and vertically, a company’s IT footprint. This is one of the game changing aspects of cloud native solutions: An organization can use and pay for as much as it needs when it needs it and have full visibility of the costs.

Break Down Silos to Create Better Customer and Partner Outcomes

Individual business units across the airline industry have traditionally relied on decades-old software and systems that may not allow these units to reach their full potential. And even if the individual system succeeds at doing its job, companies often fail to realize the full potential of their operations when pillars across the business can’t communicate with each other.

Airlines must combine and modernize disparate technology platforms to streamline operations and better serve passengers. “A siloed data center — even one that enjoys the benefits of the most modern management and analytics tools — can only deliver operational improvements within the narrow scope of the silo it serves,” said Sava. “Increasingly, individual airlines, as well as the broader industry ecosystem, understand that the improvements that matter most are those found between operational silos,” he continued.

Traffic management solutions offer a salient example. Airline gate operations and departure control systems have an extremely complex job, as they seek to optimize to hit static timetables and take-off targets amid ever-shifting circumstances, all while factoring in the upstream and downstream impacts of their decisions. The underlying system, then, must be built for agility. The more real-world complexity it can account for, the more likely it is to produce optimal outcomes for airline partners, employees, and customers.

Access and Implement New Data Insights

By migrating systems into the cloud and modernizing them through cloud solutions, airlines can also benefit from deeper data insights and analytics that stretch across their entire organization.

For example, take airline maintenance, repair, and overhaul (MRO) — the repair, service, or inspection of an aircraft. Like other large and complex areas of airline operations, airline MRO has traditionally assembled their own data-driven views of the organization. While this information may be rich in detail and highly customized to the needs of the maintenance staff, it rarely — if ever — exists in perfect harmony with the similarly detailed views of other business units, such as reservations or airport operations. Here, cloud solutions offer the solution, connecting each pillar of the organization to a shared base of operational data.

Sharing an operational view reverberates through the organization, empowers employees, and promotes consistency. “Most often, the applications used by front-line staff become far more useful and impactful when they are fed by and interact with the most current and accurate data in the airline. This is why connecting these solutions to the cloud creates profound improvement opportunities to engage employees, as we have seen with Finnair,” said Cormac Walsh, aviation industry head at Nordcloud, an IBM company.

Empowering Digital Transformation the World Over

With cloud solutions, airlines can leverage advanced technology like artificial intelligence and machine learning to vastly improve operations, tackle previously confounding maintenance challenges, and create experiences that earn customers’ business for life. They can also work toward a better tomorrow, keying on long-term goals like carbon footprint reduction by focusing on developing creative, data-based solutions that strike the right notes for customers and shareholders alike.

First, they’ll need to make the most important decision in their enterprise transformation journey: choosing a cloud migration partner. This single choice will have an outsized impact on the cost and timeline of their cloud transformation, the details of which can only become clear once the airline engages a partner.

“Each transformation journey is unique,” said Walsh. “The complexity associated with the volume of applications in scope, the number of associated financial and operating systems included in the transformation, and the degree to which applications moving over to the cloud will be modernized will each factor in. Timelines and investment estimates that don’t include these key inputs are not only useless, but dangerous,” he continued.

Cloud migration and modernization are both a journey and a destination — but getting it right can build a foundation to support the digital transformation that will take airlines into a new era.

Source: Skift

London Heathrow will lift its daily capacity cap by the end of October, unnamed sources have told the Washington Post. The airport has made no official announcement on the issue and was not immediately available for comment.

The cap limiting daily departing passengers to 100,000 is currently in place for the period July 12 to October 29. It will not be extended into the winter season, according to airlines briefed by the airport.

Similar measures to control passenger demand in the face of ground staffing shortages have been implemented at other airports, notably Amsterdam Schiphol in the Netherlands, which has attracted the ire of KLM Royal Dutch Airlines for having extended its capacity cap until the end of March 2023.

“This cap has resulted in fewer last-minute cancellations, better punctuality, and shorter waits for bags,” a spokeswoman for Heathrow told the Washington Post. “Our focus has always been on removing the cap as quickly as possible – but we will only do so if we are confident that adding in more passengers will not erode the service levels that the cap has secured.”

While the seasonal capacity reduction will reportedly finish at the end of October, Heathrow will still have a separate restriction that prevents airlines from making changes or additions at peak periods, people familiar with the plans said. The sources said that a different emergency measure, which can be used to limit capacity for shorter periods, will still be available to the airport in the case of severe disruptions during peak travel periods.

Source: Ch-Aviation

Africa is considered the next big buyer of airplanes in the few years to come, yet there are no plane manufacturing companies operating on the continent.

Also, with the increasing number of planes on the continent, Africa continues to buy spare parts from outside the continent or fly planes across oceans to have them repaired.

Aviation experts and policy makers say, time has come for airplane manufacturers to open shop in Africa to ease the cost of running planes and also increase sales.

According to Patricia Uwase, the Minister of State in the Ministry of Infrastructure. “Africa has a lot of potential and one great untapped area is having aviation manufacturing industries on the continent.

A delegate during a tour of the exhibiton

“With the recent reports from International Air Transport Association (IATA) and the International Civil Aviation Organisation (ICAO) stating that Africa is the next largest continent to order aircraft, I see no reason why manufacturers are not setting up on the continent, hope many of you are going to choose to set up. We have all the right people to do that here and this should be the beginning of the discussions,” she added.

Uwase made the remarks on Tuesday while speaking at the 6th Aviation Africa Summit and Exhibition that kicked off on Monday, September 12 in Kigali.

The two-day summit that has brought together approximately 100 global aviation companies was concurrently hosted with the Salon Mondial des Infrastructures Equipments et Services Aéroportuaires (SMIESA).

Delegates follow the State Minister Uwase’s remarks during the 6th Aviation Africa Summit and Exhibition. Olivier Mugwiza

“Africa is truly meant to be on the map. We have enough traffic to support this growth. We have natural resources, but now we need to invest in human resources to drive the growth we need on our continent,” said Uwase.

She said that the proposed development in African aviation will not be completed without the Single African Air Transport Market (SAATM) which has not been implemented yet.

“We need commitment and action to implement it. we have the responsibility to give African citizens not only the opportunity to explore and access the continent but also to enjoy the economic benefits that come with it,” said the State Minister.

Africa integration

Just like several captains of the aviation industry, Uwase also believes that Africa’s integration is strongly hinged on the prosperity of the continent’s aviation industry.

“In the current global economy, being air linked is critical to social economic development and facilitates development in the air transport sector and critical to the prosperity and growth of African Continental Free Trade Area (AfCFTA),” she said.

Her views were equally echoed by Nigeria’s Minister for Aviation, Hadi Abubakar Sirika, saying that Africa’s interconnection mainly relies on aviation rather than any other means of transport.

“In accordance with African Union Agenda 2063 of integration, the only sure way of integrating Africa is by no other way than civil aviation. The quantum of wealth and the time it will take to put up railways and roads to connect and integrate Africa, it’s huge, the time and maintenance is out of our hands. It’s doable but very difficult. Also connecting by water is closely impossible since majority of the countries are landlocked, the only possible option is aviation,” he said.

He added that, “with 54 countries and 1.2 billion people, Africa is surely a powerhouse for the world of today and the world to come but we must be able to integrate if we want to leap to the next step.”

Manufacturers eye Africa

During the summit, several manufacturers spoke of their prospects to Africa and even mentioned the numbers of planes they will be selling to African airlines.

A delegate gets some information as he tours the exhibition.

“We are looking at making 1200 new deliveries of passenger planes in Africa in the next two decades. We also estimate to train about 12,000 pilots and 16,000 engineers in that same period. So, there is growth,” said Benoit Scourion, the Services Sales Director, Airbus Africa-Middle East.

He however pointed out that there is still a challenge of interconnection within Africa which may be a hindrance to the aviation growth on the continent.

“The continent is fragmented and there are discrepancies depending on where you are located which comes with different capacities and capabilities, yet with the growth, we need to reach to the entire aviation ecosystem in Africa,” said Scourion.

Airbus forecasts that air traffic in Africa will achieve full recovery to 2019 levels between late 2023 and beginning 2025. Globally, cargo is already operating today at 9% above pre-crisis levels, and in Africa 23%

Embraer, one of the largest commercial aircraft manufacturers has also built a great presence on the continent, with over 200 aircraft operating at over 60 airlines and plans to increase its supplies.

Participants of the two-day summit that has brought together over 100 global aviation companies, interact during a tour of the exhibition

At the sidelines of the summit, Embraer also showcased their latest release, the E195-E2, the quietest and most efficient single aisle aircraft flying, saving up to 25% carbon dioxide emissions compared to previous generation aircraft, can carry up to 146 passengers in single-class configuration and 124 passengers in a typical dual class configuration.

In a press briefing during the summit, Boeing’s Managing Director of Commercial Marketing for the Middle East and Africa, Randy Heisey, told journalists that the company has estimated that intra-regional and domestic networks across the African content would grow with a robust 6.1 per cent compound annual growth rate, driving 20-year demand for 1,010 new airplanes by 2040 and valued the demand for new airplanes by the continent’s carriers at $176 billion.

Heisey forecasted that the continent’s air traffic growth is expected at 5.2 per cent, the third highest among global regions.

Qatar Airways staff pose for a photo at the company’s stand in the exhibition.

The two-day summit that has brought together over 100 global aviation companies.

Source: New Times

Africa’s aviation sector was recovering strongly from the effects of the Covid-19 pandemic, but Southern Africa was lagging significantly behind the continent’s other three IATA sub-regions (East Africa, North Africa and West Africa). This was pointed out by International Air Transport Association (IATA) regional VP: Africa and Middle East Kamil Alwadhi in his address to the recent Aviation Africa 2022 summit in Kigali, Rwanda. (IATA is the representative body for the global airline industry.)  

The African airline sector as a whole was “now” operating at 74.6% of its pre-Covid-19 levels, he noted. In July, its passenger traffic had amounted to 73.8% of that it had carried in July 2019 (during the last pre-Covid year). For summit host nation Rwanda, air passenger traffic in July this year was 106% of its level in July 2019.

With regard to air passenger capacity, as distinct from air passenger traffic, that in East Africa during July this year was 93.4% of its level in July 2019. He described this as a “robust recovery”. In North Africa, capacity was some 6.9% below the figure for 2019. And in West Africa, capacity was actually greater than in 2019, by more than 8.7%. These figures all indicated that air travel demand in these regions had returned.

“It is quite different in Southern Africa where traffic remains over 36.5% lower than before the pandemic,” he highlighted, “although the reduced capacity can be attributed to three airlines having gone out of business, one suspending its operations and what was the sub-region’s largest, shrinking its fleet, network and schedule by more than 80%.”

He called on Africa’s governments and industry to closely work together to promote a harmonised air transport agenda. Certain African governments had to stop blocking the repatriation of airline funds (as of the end of June, 12 African countries were blocking a total of $1.3-billion), as this hurt the airlines and endangered those countries’ air connectivity.

Airlines and tourism should not be treated as easy targets for taxes, levies and imposts, without some of the money being spent on upgrading and expanding national aviation infrastructures. The implementation of the African Continental Free Trade Area and the Single African Air Transport Market were the best means to achieve social and economic sustainability in Africa. And aviation safety was paramount; “[it] is our main priority,” he affirmed.

“Connectivity is precious,” stressed Alwadhi. “The crisis has demonstrated that everybody suffers when aviation stops. Covid-19 has dispelled the myth that flying only benefits the rich. A financially viable air transport sector supports jobs and must be a driving force for Africa’s economic recovery from Covid-19.”

Source: Engineering News

Foreign carriers operating to and from Nigeria are no longer allowed to sell tickets in currencies different from the local one, the Naira.

The Nigerian Civil Aviation Authority (NCAA) has announced airlines selling plane tickets in a currency different from the local one, the Naira, will be fined. Let’s look closely at why the country has made such a dramatic decision.

Nigeria’s shortage of foreign currency

Hadi Sirika, Nigeria’s Minister of Aviation, announced that foreign carriers can no longer sell plane tickets in a currency different from the Naira.

The decision stems from a shortage of foreign currency Nigeria is currently facing. Although the country’s primary source of export is oil, Nigeria has not managed to take advantage of the product’s current high price efficiently. The Nigerian Economic Summit Group (NESG) linked the country’s inability to exploit its natural resource to low production rates, pipeline thefts, and acts of vandalism.

Consequently, Nigeria is implementing harsh measures to prevent foreign currencies from pouring out of the country. For example, foreign currency funds of several airlines, for instance, deriving from selling tickets in US Dollars or Euros, have been frozen. Upon this decision, many carriers have canceled flights to Nigeria, including Emirates.

The international response

In front of Nigeria’s measures to prevent foreign currencies from flowing out of the country, the international response has been just as harsh.

Indeed, Nigeria was forced to unblock $265 million the country owed to foreign airlines. This sum represents 57% of the $464 million Nigeria withheld in July 2022. As a consequence, foreign carriers have progressively resumed flights to Nigeria. From their side, airlines must now commit themselves to selling tickets in Naira. Commenting on those airlines that refuse to do so, Nigeria’s Minister for Aviation stated:

“This is a violation of our local laws and will not be tolerated. Those airlines that will not abide by this measure will be punished.”

The Nigerian Aviation market

According to Minister Sirika, in 2016, $600 million of the total $1.1 billion generated by airlines in Nigeria belonged to foreign carriers.

Given the relevance of the Nigerian aviation market, the Minister underlined how important it is for the country to have a national carrier, which is expected to start operations in 2023. According to the Official Airline Guide (OAG), the airline operating the most frequencies to Nigeria in 2019 was Air Peace, based in the country’s capital, Lagos. Air Peace also ranked first in terms of capacity, with 2 billion seats offered to/from Nigeria in 2019, and the scenario is the same for 2022. Among the Gulf carriers, Qatar is particularly strong in Nigeria, ranking 6th in 2022 in terms of capacity, with 659,236 seats offered to/from the country. Regarding Europe, Lufthansa is the 9th carrier for capacity deployed to/from Nigeria, while Turkish Airlines places 10th.

In terms of traffic, the Nigerian market is predominantly domestic, with almost 3 million passengers estimated in 2022 and a market share of 74%. The busiest international origin is the UK, representing a market share of 4% and an estimated number of passengers of 146,628. The busiest connecting airport for Nigerian Origin & Destination (O&D) traffic is Nnamdi Azikiwe International Airport (ABV), serving the Nigerian city of Abuja, whereas Doha Hamad International Airport (DOH) is the busiest international connecting airport for traffic bound for Nigeria.

Source: Simple Flying

To spot Africa’s path to post-pandemic economic recovery, look to the skies: no region has more to gain by making air travel and cargo movement easier, cheaper, safer and more competitive.

Through this avenue, African leaders have a tremendous opportunity to revive their economies and create jobs for their young populations, not least through the $6 of related economic activity for every $1 value commercial aviation makes.

Africa’s commercial aviation gap

Despite this potential, Africans, 17% of the world’s population, accounted for only 3% of air passenger figures in 2019 before the coronavirus outbreak. Last year, with global air travel at just 42% of 2019 levels, Africans were only 1.9% of air passengers.

Pre-pandemic, the passenger load factor and traffic for flights in Africa were the lowest in the world, reflecting both a lack of passenger confidence and affordability. Africa also ranks last regarding key “connectivity” indicators used by the International Air Transport Association (IATA) to measure the integration of countries within the global air transport network.

It shouldn’t be that way.

As a significant proportion of Africa’s road network is unpaved, air transport can uniquely connect cities and allow to flow between them key economic activity and people.

Challenges to overcome

In 2019, Africa had 352 commercial airports and 198 airlines, the Air Transport Action Group (ATAG) says. However, only 33 Africa-based carriers received Airlineratings.com safety ratings and only eight received the group’s highest rating.

Unfortunately, the pandemic isolated the African continent and weakened critical links between neighbouring countries. Businesses were cut off from key markets and consumers lost access to goods as soaring ocean freight rates prompted carriers to skip African port calls and divert ships to more profitable Asia-U.S. routes. As a result, African shipping tonnage fell 10% and countries such as Kenya lost direct connections to some foreign countries.

Even before the COVID-19 pandemic, there was broad recognition of the urgent need to pry open African air transport through sweeping deregulation. Thirty-four countries, accounting for 80% of the continent’s aviation activity, have signed up for the Single African Air Transport Market, a 2018 open-skies initiative of the African Union. SAATM aims to harmonize aviation standards, lower air tariffs, open Africa to more flights and foreign carriers and boost air cargo competition.

This initiative is a great start, which private sector actors must continue to support. Governments can no longer protect money-losing national carriers at the cost of discouraging competition and keeping ticket prices high and service quality low.

Air travel is too often seen as a privilege reserved for the wealthy and a source of tax revenue, not an economic multiplier to be expanded as a necessary public utility. Chronic under-investment means airport infrastructure is antiquated and fleets are comparatively old. Lengthy transit times and cumbersome visa requirements also add maddening delays and unpredictability to travel.

“Air travel is too often seen as a privilege reserved for the wealthy and a source of tax revenue, not an economic multiplier to be expanded as a necessary public utility.”

— Hassan El Houry, CEO, National Aviation Services

A development imperative

While commercial aviation’s economic footprint and impact are enormous, the sector’s growth-spurring potential in Africa is largely untapped. A study for ATAG found that commercial aviation contributed $63 billion to African GDP in 2019 – only about a third of what it added to GDP in Latin America and the Caribbean, a region with just 58% of Africa’s population.

In Europe, North America, Asia and, increasingly, the Middle East, the rise of low-cost carriers has boosted passenger traffic, flights, connections, carrier choices and cargo volumes. Competition has lowered ticket prices and democratized air travel. Investment in infrastructure, technology and staff training have produced tremendous gains in airport retail receipts, productivity, wages and government revenue.

All of these hold important lessons for Africa’s aviation sector.

Business travel in Africa appears to be recovering, however. The World Travel and Tourism Council (WTTC) says business travel spending was on pace to increase 36% in 2021 (the second-fastest growth rate after the Middle East at 49%) and it forecasts a 23% increase for Africa in 2022.

That boost in business travel is critical to the health of the industry because it represents a disproportionate share of spending and profits. Before the pandemic, business travellers made up around 12% of global travellers but accounted for a whopping 70% of revenue for high-end hotels and 55%-75% of airline profits, the WTTC says.

African governments and private sector actors in aviation must harness this momentum to make needed changes and accelerate the industry’s growth.

In addition to being a bridge to markets, investment, technology and talent, aviation is what will knit African economies together for mutual gain. For Africa to soar, it needs aviation.

Source: World Economic Forum

Rwanda will now have full control over her upper aerial space, nearly five decades in the hands of the government of Tanzania.

A handover deed was signed last week by both governments after Rwanda notified of her intention to withdraw and directly discharge her responsibility of providing air traffic services in her upper airspace.

Silas Udahemuka, Director General of Rwanda Civil Aviation Authority (RCAA) and Tanzanian counterpart Hamza Johari, alongside Permanent Secretary at the Ministry of Infrastructure Fidèle Abimana as well as Barry Kashambo, Regional Director of ICAO Eastern and Southern African (ESAF), presided over the signing ceremony in Kigali.

According to RCAA, the country’s upper airspace was delegated to Tanzania in 1973 for provision of air traffic services.

However, officials said, to be able to regain her airspace, Rwanda fronted different reasons including improving safety in Kigali Flight Information Region (FIR) as well as meeting regulatory requirements such as Search and Rescue (SAR) obligations.

And following several coordination meetings led by The International Civil Aviation Organisation (ICAO), Rwanda was permitted to continue with the process to take over the airspace.

ICAO ordinarily gives the control of the upper airspace.

According to Serge Tuyihimbaze, an aviation expert based in Kigali, countries delegate provision of air traffic service for either technical, operational, safety or efficiency considerations.

Tuyihimbaze, who is also the Managing Director at Leapr Labs-a local drones company, argues that the opportunity in delineation of airspace lying across national boundaries could be targeting the proposed value alongside the previous aspects.

“But the opportunity cost in my opinion is around any barriers that may result in delegation of state sovereignty over airspace for provision of air traffic services,” he said.

“Of course having full control of your territory, being the airspace and ground, means a lot politically, looking at factors like independence, and others… And economically, if there was a big cost related to the provision of such services, the cost is saved! Or if real-time processing of Air Traffic data for future use is an option, this can have a good impact economically through Data Science innovations.”

For Alex Nwuba, a regional aviation analyst, countries may not wish to or cannot afford to offer navigation services over their upper airspace, in which case they delegate it over to another country or agency.

Much as Rwanda is restraining its upper space, Nwuba said, it is still a participant in the East Africa Community Unified Flight Information Region (UFIR) that creates a single block of upper airspace over Tanzania, Kenya, Uganda, Burundi and Rwanda, operating from a single area control centre under the regional open skies agreement.

“Thus it negates any opportunity cost. In Europe, this control is by Eurocontrol and AESCHNA with the francophone African nations who share the benefits.”

Nwuba shared similar sentiments with Tuyihimbaze, citing that the economic gains include collection of overflight fees while security makes a big part of the security gains.

Matthias Twahirwa, a pilot who spoke to The New Times, explained that up until recently, all aircraft flying over Rwanda above 24500 ft. didn’t need the country’s permission, but they needed permission from Dar es salam.

This was also particularly the same case for Rwanda which could not launch any object in space without Tanzania’s permission.

“Imagine if we started launching weather balloons, satellites now that we have the space agency. All that would be easy, since we would have our space back. It’s like having land but not owning the rights to use it however you want.”

On the economic front, some countries can make up to $1 million a day from airspace usage, according to Twahirwa.

Besides the handover ceremony, Johari accompanied by Tanzanian delegation, also visited Kigali International Airport and held a meeting with Rwandan aviation stakeholders including the management of Rwanda Airports Company and RCAA.

Both sides, officials said, shared experiences and best practices in regulatory services.

Source: The New Times