Africa Wings magazine issue no. 26

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Africa Wings magazine August-October 2014 issue

Transcript of Africa Wings magazine issue no. 26

  • N o . 2 6 : A u g u s t - O c t o b e r 2 0 1 4

    AFRAA

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    SITAs CEO, Francesco Violante, Talks About the new Passenger Journey

    Interview: Chairman & CEO Mozambique Airport Company, Dr. Emanuel Chaves

    Killing the Goose that Lays the Golden Eggs

    The impact of China on the African Aviation Industry

    AviationSuppliers & StakeholdersConvention 2014

    AviationSuppliers & StakeholdersConvention 2014

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    Affiche_46eme_AFRAA_Print.pdf 1 24/04/2014 15:49:01

  • august - october 2014 1AFRAA

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    The idiom killing

    the goose that lays

    the golden eggs is

    derived from one of

    the fables attributed

    to Aesop, a slave and

    storyteller believed to

    have lived in ancient

    Greece between 620 and 560 BC. In this tale,

    a man and his wife had the good luck to own

    a goose that laid a golden egg every day. They

    soon began to think they were not getting rich

    fast enough and, thinking the bird must be full

    of gold, they killed it to get all the gold at once.

    However, when they cut the goose open, there

    was no gold inside. If they had not become

    greedy and killed the goose, it would have

    kept laying a golden egg every day.

    This idiom aptly explains the attitude of

    some African Governments when it comes

    to imposing taxes, charges and fees on

    passengers, fuel and other aviation activities.

    Despite the critical role that air transport

    plays and its significant contribution to the

    economies of African countries, governments

    policy makers continue to view air transport

    as a luxury service for the elite. Directly and

    indirectly, air transport supports 6.9 million jobs

    in Africa and contributes US$80.5 billion in

    GDP, according to ATAG. Despite this, many

    African governments and airport service

    providers have tended to burden airlines and

    airline users with high taxes, fees and charges.

    This is in complete disregard to the fact that

    airlines across the continent are going through

    periods of critical financial challenges and

    struggling for survival.

    According to ICAO, fuel for international

    air transport should not be taxed. It is also

    common in BASAs to prohibit the taxation

    of fuel for international flights.

    ICAO makes a distinction between charges and taxes as follows:

    Chargesarebasedoncostofserviceandthe revenue is retained by the aviation

    sector

    Taxesareleviestoraisegovernmentrevenues which are applied to non-aviation

    purposes.

    ICAO Council Resolution on charges is as follows:

    Thereshouldbenofiscalaimsbehind the charges

    Chargesshouldberelatedtocosts Chargesshouldnotdiscriminateagainst

    air transport compared with other modes

    of transport.

    Despite these ICAO stipulations, African

    aviation fuel is generally overtaxed. The

    various taxes, duties, levies and charges on

    fuel contravene global norms and handicap

    the African aviation industry. Globally, fuel

    accounts for about 30-36% of an airlines

    operational cost whilst in Africa this ranges

    from 40-55%. Fuel prices at some stations

    in Africa are over twice the world average.

    This has a very adverse impact on the

    competitiveness of African airlines.

    Airlines often put fuel surcharge on tickets to

    compensate for increasing fuel prices. This

    unfortunately puts ticket prices way beyond

    the means of the majority of African people,

    most of who have never been at an airport.

    In addition to fuel taxes, other taxes are also

    generally higher in Africa in comparison

    to other regions and relative to the quality

    and availability of services and facilities to

    carriers and air transport users. International

    passengers departing from several African

    Airports are charged between US$40 to

    US$100. Included in this group are major

    destinations such as Accra, Abidjan, Dakar,

    Djibouti, Ouagadougou, Nairobi and Entebbe.

    Airports in West African region have the

    highest charges, with charges as high as

    US$100 per passenger, with some airports

    in East Africa charging US$40. Passengers

    in North African airports enjoy the lowest

    passenger taxes which are generally at

    international standards at below US$20.00.

    Contrast this with the Gulf States where

    passenger charges range from US$10 to

    US$20. These governments and regulatory

    authorities believe the aviation industry is a

    key driver for the economic development of

    their States and hence have developed very Dr. Elijah Chingosho

    AFRAA Secretary General

    foreword

    Killing the Goose that Lays the Golden Eggs

    supportive policies which benefit their carriers

    and their countries. These policies include low

    taxes, charges and fees on fuel, passengers

    and other areas, as well as providing excellent

    infrastructure and allowing airlines to recruit

    the best talents from anywhere in the world,

    and facilitating visas for customers travelling

    into their countries. Apart from Heathrow

    Airport which charges about US$62.00 per

    passengers, charges from the rest of EU

    Airports are below US$30.00, well below

    the average in Africa.

    In order to realize the huge potential existing

    in the continent, all stakeholders need to work

    together to reduce the cost of travel so as to

    make it affordable to a larger sector of the

    African population who currently are excluded

    from the use of air transport because of the

    high fares, among other reasons.

    What is clear is that with the current cost

    structure of African carriers, it is very difficult to

    survive the increasingly fierce competition and

    withstand the forces lined-up against them.

    These forces are marginalizing the airlines

    from international routes. This is only a prelude

    for the continent to be completely driven

    out from the air transport industry including

    intra-African routes. It is to the common

    interest of all stakeholders including airports,

    governments, regulators, Regional Economic

    Communities (RECs) and continental

    organizations such as the AU, AFCAC,

    AFRAA and ACI Africa to support the growth

    of indigenous African carriers. This way,

    African airlines will thrive and re-capture their

    rightful market share. African governments

    and airports need to take long-term and

    strategic view of the industry.

  • Africa Wings2AFRAA

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    contentsN o . 2 6 : A u g u s t - O c t o b e r 2 0 1 4

    AFRAA

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    SITAs CEO, Francesco Violante, Talks About the new Passenger Journey

    Interview: Chairman & CEO Mozambique Airport Company, Dr. Emanuel Chaves

    Killing the Goose that Lays the Golden Eggs

    The impact of China on the African Aviation Industry

    AviationSuppliers & StakeholdersConvention 2014

    AviationSuppliers & StakeholdersConvention 2014

    Publishers:

    Editorial Director:

    Managing Editor:

    Copy Editor:

    Senior Designer:

    French Translation:

    Production /Advertising:

    Camerapix Publishers International Limited

    Rukhsana Haq

    Maureen Kahonge

    Cecilia Gaitho

    Sam Kimani Ephrem Kamanzi

    Azra Chaudhry (UK)Rose Judha (Kenya)

    Africa Wings is published quarterly for AfRAA by

    Camerapix Magazines Limited

    Correspondence on editorial and advertising

    matters may be sent to either of these addresses:

    Editorial and Advertising Offices:Camerapix Magazines Ltd

    PO Box 45048, 00100 GPO Nairobi, Kenya

    fax: +254 (20) 4448818 or 4441021E-mail: [email protected]

    Camerapix Magazines (UK) Limited32 friars Walk, Southgate,

    London, N14 5LPTel: +44 (20) 8361 2942 Mobile: +44 79411 21458

    E-mail: [email protected]

    [email protected]

    Printed in Nairobi, Kenya

    2014 CAMERAPIX MAGAZINES LTD

    All rights reserved. No part of this magazine may be reproduced

    by any means without permission in writing from the publisher.

    4 AFRAA Successfully Stages its 3rd Aviation Convention in Nairobi The outcome and industry issues discussed during the event was held under the theme: Partnering for Aviation Business.

    13 Interview with the Mozambique Airports Company Dr. Emanuel Chaves, Chairman & CEO of the Mozabique Airports Company, shares the development, experiences and future plans of the company.

    16 The impact of China on the African Aviation Industry China has become an important economic player in the development of Africa.

    18 The New Passenger Journey: Interview with SITA SITAs CEO, Francesco Violante, talks about the new passenger journey in view of the changing IT trends.

    20 Aircraft Analysis: BAe 146/Avro Regional Jets A mature aircraft with a loyal, active and robust followin