In an effort aimed at lowering flight costs, reducing costs of undertaking business and boosting trade in the region, the East African Business Council (EABC)has urged the East African Community (EAC) partner states to ensure that air transport services are liberalised.
According to findings from the latest policy paper by EABC, Costs and Benefits of ‘Open Skies’ in the EAC region, air-transport liberalization is set to lower flight costs by nine percent and result in a 41 percent increase in flight frequencies.
The policy paper recommends for the EAC partner states to provide subsidies for the aviation industry in the form of direct financial support, loan guarantees, corporate bonds and tax reliefs.
In a statement, CEO of EABC, John Bosco Kalisa, said liberalisation of air transport in the region is set to increase traffic volumes, improve connectivity and lower air transport fares.
“The domestic air transport sector remains protected, reducing accessibility and increasing air transport cost at the expense of potential users. Therefore, liberalisation of air transport will in turn increase trade and tourism, inward investment and productivity growth,” said Kalisa.
Kalisa also highlighted that by removing foreign restrictions, EAC partner states will be able to attract private sector investment.
“This will open up access to capital and avail investment in infrastructure upgrades and capacity expansion for regional airports.”
To encourage imports by air, Kalisa said it was important for EAC partner to waive all import duties and Value Added Tax by air during the Covid-19 crisis.
“I also also urge states to waive landing fees, excise duty on aviation fuel navigation, parking and Covid-19 related fees to see reduction in operating costs.”
The policy paper has it that Covid-19 has seen a drop in the tourism sector revealing that last year, EAC received about 2.16 million international tourists compared to 7.05 million in the year 2019.
“International tourists receipts dropped from USD 6.1 billion in 2019 to about 1.9 billion in 2020,” the policy paper indicated.
EABC Chairman Nicholas Nesbitt said finalisation and implimentation of EAC regulations on liberalisation of air transport services is a big move that can strengthen international investment.
“The EAC bloc should work to attract international investors and embark on joint regional investments,” Nesbitt underscored.
EABC also urged EAC states to remove restrictions highlighting that this will enable them to grant each other the free exercise of the rights of the first, second, third, fourth and fifth freedoms of the air on scheduled- passenger as well as non-scheduled passenger or cargo flights performed by eligible Airlines to/from their respective territories.
According to the Africa Development Bank, The EAC Gross Domestic Product growth is projected at 3.5 per cent in 2021 and 4.7 per cent in 2022.
The EABC is the regional apex body of the private sector in the EAC member states of Kenya, Uganda, Tanzania, Burundi, Rwanda and South Sudan.
By Joyce Mukucha
