The East African Business Council (EABC) has called for a regionally coordinated approach on the resumption of air travel to spur intra-EAC trade and revive the tourism and hospitality sector heavily hit by the COVID-19 pandemic.
Kenya and Rwanda resumed international flights on 1st August 2020 while Tanzania did so on the 18th of May 2020.
“These are important steps towards the recovery of the aviation and tourism sectors, however, the differences emerging in regional air transport services among some partner states are set to adversely affect the rebound of business in the region,” Hon. Dr. Peter Mathuki, Executive Director of EABC said in a press release.
Intra EAC trade stood at $5.98 billion in 2018 according to EAC Trade and Investment Report. With the unprecedented impact of COVID-19 pandemic on the economy, regional trade is expected to decline by 50 percent this year.
According to the International Air Transport Association (IATA), the EAC Partner States will potentially lose upwards of US$5.4 billion of tourist local spending for the year 2020 due to protracted closures and restrictions of seaports and airports.
The impact of COVID-19 has led to a decline in the number of air passengers leading to a US$0.54 billion revenue loss in Kenya risking 137,965 jobs while US$20.4 million base revenues loss in Rwanda, risking 3,000 jobs.
The re-opening of regional air transport services will integrate the regional logistics value chains for increased exports of fresh produce, regional tourism and enable service providers to tap into the larger EAC market.
“This is set to bolster business continuity and resilience to sustain livelihoods and jobs,” Dr Mathuki said.
The EABC urged the EAC Partner States to prioritize and fast-track the unconditional re-opening of regional air transport services and agree on an EAC coordinated approach on the opening of the regional aviation sector, in line with the World Health Organisation (WHO) guidelines and measures.
In addition, the EAC Partner States should consider temporarily granting the Yamoussoukro Decision (YD) 5th to 9th Freedom rights to effectively increase capacity, reduce inefficiencies and costs; waive landing fees, excise duty on aviation fuel, navigation, landing, parking and COVID-19 related fees to reduce operating costs; and the reduction of permit and fees for service providers from the EAC region.
In line with the implementation of the EAC Common Market Protocol, EAC Partner States have developed Draft Regulations on the Liberalization of Air Transport Services. The objective of the regulations is to liberalize air transport services within the Community in order to develop the industry and contribute to the welfare of the citizens of the Partner States.
According to the Study on Costs and Benefits of ‘Open Skies’ in the EAC commissioned by the EABC, the quantitative analysis based on data from East Africa, provided robust and compelling evidence that liberalization leads to 9% lower average fares and a 41% increase in frequencies which stimulate passenger demand.
Furthermore, the study established that liberalization between five EAC Partner States -Burundi, Kenya, Uganda, Tanzania and Rwanda- could result in an additional 46,320 jobs and USD202.1 million per annum in Gross Domestic Product (GDP).
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