The East African Business Council (EABC) is concerned over the high cost of air transport in the region which is attributed to the slow pace of liberalisation in cargo freight. This is due to the fact that the initiative to develop the EAC regulations on liberalization of air transport services has not been completed.
In line with the implementation of the EAC Common Market Protocol, EAC Partner States have developed these draft regulations. 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.
To enhance public and private dialogue on transport and logistics for cargo freight liberalization, EABC with support from TradeMark East Africa (TMEA) is commissioning a study to assess the effectiveness of domestication of region’s air space.
The study will look into the effectiveness of adopting the EAC Single Air Space Agreement instead of Bilateral Agreement Air Services Agreements (BASAs) and asses the need for EAC Partner States to liberalize EAC air transport services by granting to each other the free exercise of the rights of the first, second, third, fourth and fifth freedoms of the air on scheduled and non-scheduled cargo and passengers.
The consultant will also asses the implementation of the Open Skies Policy as granted by Yamoussoukro Decision and enable a multilateral “Open Skies Policy for Cargo Freight. He will also assess benefits of liberalisation by coming up with a strategy aiming at addressing the high cargo fares through reduction of the taxes, charges and fees that impact on the ticket cost in EAC.
Capacity to attract private sector investment through progressively removing foreign restrictions to open up access to capital and financing cargo airlines will also be a key focus area for the study.
According to the Study on Costs and Benefits of ‘Open Skies’ in the East African Community 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 it is estimated 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).
Air transport in East Africa is still expensive by international standards; as is exhibited in the current high passenger airfares and freight and cargo charges.
