East African Aviation industry in dire need of ‘Open Sky’ implementation
Last evening I met an Aviation expert working with an East African based aviation firm that is among those pushing for the implementation of the East African Community’s “Open Sky” initiative who primary target is to address connectivity issue in a geographically fragmented region as the five member countries grapple with increased travel under a single market economy and the need for more airport and seaport infrastructure facilities. Last year, I wrote http://www.contadorharrison.com/entebbe-airport-expansion-will-spur-growth/ in Uganda now expected to be Africa’s second fastest growing economy for the next five years. According to chinwag with the aviation guru, liberalization of services in EAC are now being tackled by business and political leaders and the region is successfully reducing tariffs on trade in goods and services. This means the region now has to work on removing non-tariff barriers to trade and one of the critical sectors is on the aviation service sector. To him, EAC is working towards removing the bulk of work done on trade in services and of the major packages it has already completed work on and is working on the liberalization on the services. The focus in the aviation is to allow investments in areas that put a ceiling on equity stake and among the remaining trade in services sectors that EAC countries are working on are on air services especially on the proposed Open Sky, the region aim to promote competition in the airline industry, and to give all airlines from East African Community’s the scope to compete on intra East African routes.
Open Sky initiatives will give airlines extra flexibility over their route development. There are a few regional agreements and that has led to substantial liberalization or integration. In a study conducted three years ago, East African Countries have a wide range of types of bilateral agreements in place and a range of government policy stances. Some bilateral agreements are very liberal, though others are restrictive, limiting the number of airlines that can compete, and the amount of capacity they can offer. Some countries like Tanzania and Kenya are now allowing additional gateways, but the impact of this is lessened in some cases because overall capacity is still limited. There are also different policies in each of the East African Community countries wherein some are liberal and others with limitations. This has something to do with the scale of the aviation sector in each member state. East African region has the opportunity to forge open sky with it’s partners regional trading partners like Southern and West African regions. An air services agreement may also be forged with region’s main trading partner European Union but that wont happen unless the region’s single harmonized window is implemented the air link connectivity will not work.