Air transport – IATA address African issues at regional aviation forum in Accra

Remarks Muhammad Ali Albakri Regional Vice President, Africa and Middle East

Your Excellency Dr. Mahamudu Bawumia, Vice President of the Republic of Ghana, Honourable Joseph Kofi Adda, Minister of Aviation – Ghana, Mr. Sadiq Silla, Deputy Minister of Transport & Aviation – Sierra Leone, Mr. Simon Allotey, Director General, Civil Aviation Authority – Ghana, Distinguished Ladies and Gentlemen, Good morning.

On behalf of the International Air Transport Association I would like to thank His Excellency The Vice President of the Republic and the people of Ghana for accepting to host the IATA Regional Aviation Forum and recognize all the help and support they have extended to make this event a successful gathering for all of us.

We have a lot of important topics to discuss over the next couple of days. These topics were carefully chosen so that our meeting here is more than just a coming together of our industry. We hope the sessions will inspire us into more than just discussion bur rather tangible take-aways and a plan of action!

Allow me first to express my sincere appreciation to the government of Ghana and in particular, the Ministry of Aviation – our partner for the event. A special thank you to Honourable Kofi Adda, Ghana’s Minister of Aviation, for all the support to make this event a successful one.

Aviation in Ghana

Aviation is a key enabler for economic and social prosperity in Africa. Indeed, Ghana is a perfect location to host this Regional Aviation forum and deliver this message.

The country is a good example of Africa’s growth and what can be achieved when government recognizes the value of aviation and prioritizes it as a strategic pillar to drive socio-economic growth. Because of strong government support, Ghana is a leader in the West and Central Africa region.

From the recently announced aviation security audit, where Ghana obtained a provisional Effective Implementation (EI) rate of 89.89 percent, the highest by an African country, to the wonderful new terminal recently commissioned at Kotoka International Airport, Ghana has a lot to be proud of. Ghana has also passed a new civil aviation act to further improve safety and strengthen security. Aviation modernization is needed across Africa and Ghana is a great example of how to do it effectively.

There is still a lot of work to be done in crucial areas both here and across the continent. African aviation needs deliberate, focused policies that will help the industry consistently grow to its full potential. That is why the theme for today’s event is “Aviation: Business for Regional Prosperity”.

Value of Aviation

Aviation is strategic; it has an extremely important role in supporting Africa’s socio-economic development. This is properly encapsulated in the African Union Agenda 2063 which anticipates intra-Africa trade will grow from less than 12% in 2013 to approaching 50% by 2045, and global trade will rise from 2% to 12%.

Currently, air transport supports 6.2 million jobs and $55.8 billion of GDP in Africa. Over the next 20 years, demand for air transport is expected to double, with a 4.6% annual growth – the second fastest of all IATA regions. This translates to an extra 199m passenger journeys per year in 2037 for a total market of 334 million passengers. Cargo volumes are also expected to double over the next 20 years. Aviation also plays a central role in achieving 15 out of 17 Sustainable Development Goals.

It is exciting to note that Ghana has included Aviation as part of its National Development Plans under it’s UNSDG Action Plan, one of the few countries on the continent to do so. We encourage others to follow; given the immense benefits that aviation can contribute to economic growth, development and job creation.

While it is evident that aviation in Africa has the potential to fuel trade and economic growth, several barriers exist:

1. Weak and costly infrastructure

2. High ticket prices

3. Poor intra-Africa connectivity, and

4. A proliferation of taxes and charges

So, what do we do? How does Aviation move forward? How do we translate all our collaborative efforts into the promise that lies ahead?

Collaboration

First, we must ensure a strong dialogue and partnership between government and the aviation industry if we are to deliver the economic and social benefits to our citizens.  No State or airline can deliver the full benefits that aviation offers by operating alone; competition is part of our business, but collaboration and cooperation must be the common denominator upon which we all operate. Governments need to foster greater collaboration and coordination and develop and execute joint actions plans to maximize aviation’s impact.

Collaboration between airlines is also crucial if we want to improve connectivity and increase the share of African carriers moving traffic to, from and within Africa. Recently, South African Airways and Africa World Airlines signed a cooperation agreement which will feed into improving African connectivity.

But what are the regional priorities that we must address together? For Africa, we must focus our efforts on five issues, namely: (1) safety, (2) infrastructure and capacity-building, (3) financial sustainability, (4) high industry costs and (5) Africa connectivity, with the Smarter Regulation approach at the heart of how we work together.

Safety

Safety comes first.  It’s the industry’s top priority in every region.  Tragically, we suffered the loss of ET302 in March.  However, 2018 marked the third successive year in which there were no African airline jet hull losses or fatal accidents.

Last year, Africa was the only region to see a decline in the all accident rate compared to 2017.   This is great progress.  We need to continue this momentum.

Our call to action is for governments to adopt IATA’s Operational Safety Audit and its Safety Audits for Ground Operations (IOSA and ISAGO) as standards to complement their own national safety oversight.  We urge governments and industry to collaborate to ensure ICAO standards and recommended practices are met.

       2. Infrastructure and Capacity-building

Second is infrastructure.  Africa’s expected growth in demand for air transport will require efficient and cost-effective infrastructure to enable economies and the industry to grow and reap the benefits of aviation.

But this growth cannot be achieved or sustained without the necessary capacity and skilled workforce.  Africa needs skilled aviation professionals in far greater numbers than are available today.  The capacity to develop and build those skills is limited.  We call on governments to partner with industry associations and training institutions to continuously build capacity to nurture current and future aviation professionals.

Financial Sustainability

A financially sustainable industry will require airlines and their strategic service providers to review and enhance their internal processes. This means eliminating unnecessary and costly activities while taking full advantage of digitalization to achieve the needed efficiencies.  This is to provide the expected services to travellers, but also to increase profits to enable reinvestment for growth and expansion.

High Industry Costs

The fourth issue I want to address is the high industry costs. This is one of Africa’s biggest challenges.  Passenger taxes, VAT and Solidarity taxes are a big issue.  So too are Air Navigation and Airport charges.  These combine to make intra-African travel 45% more expensive than the world average.  At the same time, jet fuel is 40% more expensive in Africa than in the rest of the world.

Governments have a vital role to play by improving the situation. Hidden costs, such as taxes and fees, should be disclosed and benchmarked against global best practices.  Taxes and cross-subsidies on international jet fuel should be eliminated to align with bilateral agreements, the Chicago Treaty and ICAO principles.

We encourage governments to use the Smarter Regulations approach to collaborate with industry stakeholders and also to consult transparently and objectively across the aviation value chain to ensure benefits for all.

Africa Connectivity (SAATM)

The Single Africa Air Transport Market (SAATM) is arguably the continent’s most important policy initiative now – not just for aviation, but for trade and all the ancillary socio-economic benefits aviation brings. Properly harnessed, the benefits of the SAATM will far exceed expectations. The benefits of a connected air transport market are evident in Europe, Asia, Latin America and North America.  Africa cannot afford to be left out. The time for SAATM is now. We look forward to some robust discussions on this and all the other topics on the agenda.  More importantly, we look forward to actionable takeaways to support the work been done by various stakeholders.

Closing

We have a very tight schedule, so please allow me to end my opening remarks here.

The agenda for this event is a consolidation of the various hot topics in African Aviation today. The sessions will be very informative and interactive, and I wish you all very successful deliberations. We encourage you to be as candid as possible so that we can address the issues that really matter. There are a lot of leaders and influencers in this room today and I am confident that we will leave this forum more informed, reinvigorated and committed to the opportunities and challenges that lie ahead.

Aviation is the key to unlocking the prosperity of our dear continent and nations. Once again, our sincere thanks to our co-host the Ministry of Aviation, and to our sponsors Access Bank, UBA Bank, Zenith Bank, Ghana Airports Company Limited, Ghana Civil Aviation Authority, Sabre Nigeria, West Blue Consulting and P.W. Ghana for their immense support towards this event.

Thank you.

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