EABC touts low air transport costs in EAC region
EAST African Business Council (EABC) has urged governments of the East Africa Community (EAC) partner states to have single air transport services agreement to lower the cost of air tickets for both passengers and cargo in the region.
“The EAC should consider replacing the existing bilateral air services agreements (BASAs) with a single air transport services agreement for EAC to lower the cost of air transport in the region,” said Mr John Bosco Kalisa, the EABC Chief Executive Officer in Arusha on Thursday.
The EABC CEO was speaking during the Validation Webinar for the study on air transport services liberalisation in the East African Community (EAC) organised by EABC in partnership with Trademark East Africa (TMEA).
Mr Kalisa appealed to the EAC Heads of State to agree on offering preferential and national treatment to EAC airlines as currently in some countries foreign airlines enjoy more favourable treatment than EAC airlines.
He said the region can start offering preferential and national treatment to EAC cargo planes to boost exports.
He expounded that the EAC Partner States should fast-track the finalisation and implementation of EAC regulations on the liberalisation of air transport services in line with the EAC Common Market Protocol.
He also said that limited infrastructure, lack of standardised regulations and high air transport costs are among the challenges affecting air transport sector in EAC.
In her opening remarks, the TMEA Head of Public-Private Dialogue and Export Capability, Ms Paveen Mbeda reiterated TMEA’s commitment to partner with both public and private sectors to unlock bottlenecks and facilitate trade in the EAC and the continent.
She appreciated the Kingdom of Netherlands for funding the Public-Private Dialogue Programme and expounded that air transport cost is an enabler of tourism and export of horticulture contributing to EAC’s Gross Domestic Products and foreign reserves.
The Principal Economist-Investment & Private Sector Promotion of the East African Community Secretariat Mr Charles Omusana said, “liberalisation of air transport services will contribute to our greatest desire of growing intra-EAC trade.”
The study on air transport services liberalisation analyses cost drivers and regulations including taxes, levies and other related charges and have proposed recommendations that will help to lower the cost of air transport in the EAC.
Preliminary findings of the study on air transport liberalisation in the EAC show a percentage increase in passenger traffic leads to a 0.1 per cent increase in tourism receipts.
Similarly, a per cent increase in freight carrier departures leads to a 0.2 per cent increase in tourism receipts. Limited liberalisation of air transport contributes to high flight ticket rates and visa restrictions limit the movement of non-residents into the EAC region.
The preliminary findings also reveal cargo volumes have largely stagnated in the EAC region due to the high cost of air cargo, the lengthy bureaucracy involved in obtaining clearance coupled with some airlines’ scheduling delays and inadequate infrastructure like cold rooms and route restrictions making it difficult to access new markets.
On other hand, the findings also show that the percentage increase in air passenger traffic leads to a 0.05 per cent increase in Gross Domestic Product.
This is achieved through an increase in trade, tourism, inbound investment, production and employment.
Air transport liberalisation in the EAC countries could result in an additional 46,320 jobs and 202.1 million US dollars per annum in GDP.
The webinar on the study of air transport liberalisation in EAC was attended by over 70 actors who validated the study findings.