Study: Open airspace in East Africa will bring millions of dollars to the region
A new study from the East African Business Council (EABC) says an open airspace policy in East Africa could generate more than $200 million in annual GDP for the region.
The organisation presented its findings at the Hilton Hotel in Nairobi, Kenya, on Wednesday. The study, entitled The Costs and Benefits of Open Skies in the East African Community suggests EAC member countries should increase their efforts to implement an open skies policy in the region.
“The study economic analysis demonstrates that increased air service and traffic resulted in positive benefits for the total EAC economy,” Lilian Awinja, EABC CEO, said at the event on Wednesday.
According to the study, an open airspace in the EAC could generate US$ 202.1 million per annum in GDP while creating an additional 46,320 jobs in the region. For the industry itself, the study also claims open skies could lower the average fare by 9% and increase frequencies by 41%, thereby increasing passenger demand.
Open airspaces contribute to greater trade and tourism, inward investment, productivity growth, increased employment and economic development, according to the study.
Work to be done
TheEABC study offers some impressive economic figures but it also highlights the challenges that lie ahead for East Africa in creating an open skies policy. Namely, countries in the region would need to restructure their national carriers and aim to increase profits by expanding into new markets – a move that doesn’t guarantee success.
Regional airlines also tend to struggle under open skies policies as foreign carriers operate locally. Smaller airlines often lose price battles against their larger counterparts and national airlines can suffer, too.
Thai Airlines is among the national carriers to complain about open skies policies damaging operations. The winner in this situation, of course, the passengers who enjoy lower prices – at least in the short-term.
However, there are infrastructural challenges to face as well. Increasing traffic at all of East Africa’s major airports requires major investment and development, not to mention redrawing flight paths in and out of the region.
One thing that can’t be disputed is an open skies policy would generate a huge number of jobs in a region where a growing unemployment crisis looms.
Featured image: By BriYYZ from Toronto, Canada – Ethiopian Airlines Boeing 777-200LR ET-ANR, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=25907365