The International Air Transport Association’s (IATA) regional vice president for Africa and Middle East, Mr Kamil Alawadhi, has charged African government to avoid imposing higher fees, levies, carbon taxes or new taxes on air transport, trade or tourism.
Instead he advised governments to follow the policies of the International Civil Aviation Organisation (ICAO) on charges and infrastructure and consult with airlines and industry to ensure a fair and cost-effective operational environment that benefits a more connected continent.
He gave the advice in his speech at the opening of the African Airlines Association (AFRAA) annual general assembly taking place in Kampala, Uganda.
“Africa’s aviation industry is still recovering from significant losses due to the pandemic. To make up for this shortfall, governments should avoid imposing higher fees, levies, carbon taxes or new taxes on air transport, trade or tourism.
“These measures would only make air travel more expensive and less accessible in Africa, where the average airfare is already 30 per cent higher than the industry average and the jet fuel cost is 10-20 per cent higher than the global average.
“Higher costs would discourage customers who are sensitive to prices, resulting in lower demand and revenue for airlines and other stakeholders in the aviation sector, such as airports, ground handlers, suppliers and air navigation services.
“They would also hamper economic development and limit the opportunities for job creation and income generation. High cost leads to high price, which reduces demand and growth in a price elastic market, and ultimately affects connectivity negatively,” Alawadhi said.
Besides, Alawadhi said infrastructure in Africa comes with a high price tag as user charges across the continent are 8 per cent higher than the industry average.
“Infrastructure charges must be set at levels that are fair, justified, and reflective of a value service proposition for airlines and passengers. Efforts through a pan-Africa fuel campaign have resulted in charges reductions in Chad, the Ivory Coast and Zambia over the last five years,” he said.
The IATA regional director also spoke on airlines’ blocked funds saying the issue plagues aviation on the continent.
“Since 2018, a significant amount of blocked funds have been repatriated from Angola, Ethiopia, Ghana, Nigeria, and Zimbabwe through working with the respective governments.
“As of September, $1.68 billion of airlines funds are blocked across Africa out of $2.36 billion globally. The numbers are alarming and the impact of this on connectivity is devastating,” he said.
He noted that aviation is capital intensive and cash flow is key for airlines’ business sustainability stressing that when airlines are not able to repatriate their funds, it severely impacts their operations and impacts their decisions on where to fly.
“The risk of blocked funds is not just limited to airlines; the negative impact extends to the countries blocking the funds. It impacts the country’s economy and its connectivity, and it hurts investor confidence and reputation. Aviation is not only an economic enabler; it is a pillar of modern economies.
“Governments must prioritize aviation and find sustainable solutions in the clearing of blocked funds, and we continue to offer our support in any way we can,” he added.
Besides, Alawadhi said infrastructure in Africa comes with a high price tag as user charges across the continent are 8 per cent higher than the industry average.
“Infrastructure charges must be set at levels that are fair, justified, and reflective of a value service proposition for airlines and passengers. Efforts through a pan-Africa fuel campaign have resulted in charges reductions in Chad, the Ivory Coast and Zambia over the last five years,” he said.
Nevertheless, he said IATA was working with AFRAA to *liberate airline the blocked funds, promote regional air connectivity by working together with governments to support the implementation of the Single African Air Transport Market (SAATM), *improve operational safety through a data-driven, collaborative programme to reduce safety incidents and accidents, achieve reasonable levels of taxes and charges by focusing governments on the long-term social and economic benefits of aviation, and *support airlines to achieve the industry’s goal of NetZero emissions by 2050.
