East African member states have been challenged to constitute EAC single air transport services agreement, to grow trade within the region.
Limited infrastructure, lack of standardised regulations, and high air transport costs are among the challenges affecting the air transport sector in EAC.
Limited liberalisation of air transport has also contributed to high flight ticket rates and visa restrictions limiting the movement of non-residents into the EAC region.
Speaking during a Validation Webinar for the Study on Air Transport Services Liberalisation in the EAC, East African Business Council (EABC) Chief Executive John Bosco Kalisa, urged the member States to have Single Air Transport Services Agreement to lower the cost of air tickets for both passengers and cargo in the region.
The council now wants the region to start offering preferential and national treatment to EAC cargo planes to boost exports.
“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 Kalisa.
According to the stakeholders’ air transport liberalisation in the EAC countries could result in an additional 46,320 jobs and US$ 202.1 million (Sh25.1 billion) per annum in GDP.
The study on air transport services liberalisation sought to analyse cost drivers, and regulations (including taxes, levies and other related charges) and proposes recommendations to lower the cost of air transport in the EAC.
The preliminary findings of the study on air transport liberalisation in the EAC, show a percentage increase in passenger traffic leads to a 0.1666 percent increase in tourism receipts.
Similarly, a percentage increase in freight carrier departures leads to a 0.299 percent increase in tourism receipts.
EABC pointed out that the region has been granting foreign airlines more privileges than local ones.
Kalisa, asked the heads of state to agree on offering preferential and national treatment to EAC airlines as currently in some countries, foreign airlines enjoy more favorable treatment than EAC airlines.
The findings further revealed that 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.
There are also issues such as inadequate infrastructure like cold rooms and route restrictions, making it difficult to access new markets.
The preliminary findings of the study show the percentage increase in air passenger traffic leads to a 0.0515 percent increase in Gross Domestic Product.
“Liberalisation of air transport services will contribute to our greatest desire of growing intra-EAC trade,” added Principal Economist-Investment & Private Sector Promotion of the East African Community Secretariat Charles Omusana.
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.
The validation workshop was organised by the EABC in partnership with TradeMark Africa (TMA), funded by the Ministry of Foreign Affairs of the Netherlands.
