On implementing the Single African Air Transport Market

The Single African Air Transport Market ( SAATM) is the first flagship project in the African Union’s “Agenda 2063”. It was launched and established on 28th January, 2018, during the 30th Ordinary Session of the African Union Assembly held in Addis Ababa, Ethiopia. The SAATM is seen as being critical to the integration agenda of the African Union. It is at the core of the logistic infrastructure needed so that the African Continental Free Trade Area takes off successfully. Another is the protocol on the Free Movement of People and goods and the African Passport – they all complement the implementation of SAATM.

The benefits of SAATM will translate not only to improved customer experience but will increase footfalls at African airports as well as increase both aeronautical and non-aeronautical revenues across airports in Africa. It will help in the effort to make aviation play a predominant role in connecting Africa, give a boost to the liberalization of civil aviation in Africa and be a catalyst to the economic integration agenda of African countries.

This improvement in revenue and footfalls is seen in the objective of the undertaking: It is expected that it will enhance air connectivity across the African continent which will result in a reduction in the journey and waiting times for very many passengers by twenty percent or more. There will be competition of air services that will translate into a reduction in fares which will also result in the growth of the Tourism industry in the continent and also create jobs in the tourism and  aviation industries.

Terminal buildings across Africa are getting bigger as a result of remodeling. Some of these rebuilt terminal buildings were financed from loans taken usually from foreign and government investors. These loans that are not free will require cash flows that not only will repay the debt (capital and interest included) but contribute to offsetting both fixed and operating costs of keeping the terminal buildings open and in use.

When flights can freely connect among African countries, the long wait times or sometimes long journey undertaken to move from, say, Lagos to Seychelles, will be reduced. Some journeys undertaken by road may easily be undertaken by, say, a low cost carrier as we see in Europe. One can make a trip by road from Brussels to Bologna and fly back the next day from Bologna to Brussels on a Low Cost Carrier at a fare lower than making the trip by road! Just the same way as it is faster to move by air from Lagos to Accra than by road.

Can faster, better and cheaper be an operating strategy for the implementation of SAATM? First, our airports must begin to think about eliminating waste. Waiting times at airports that become too long and increase the apprehension of the passenger will be counterproductive. Sometimes these waiting times are not within the control of the airport operator. This then calls for collaborative effort across the value chain to ensure that the hurdles towards the reduction of wait times are removed.

All countries in Africa do not have the natural resource for the production of jet fuel – crude oil. Our factor endowments are not the same. Some have generous sunshine that can drive innovation in solar technology while others can produce the fuel needed for aircraft operations. IATA, the global body that represents the interests of airlines, estimated in its report that fuel was the industry’s largest cost item in 2022. It had risen to 24 percent of overall costs from 19 percent in 2021. So, collaboration in this regard will help promote the SAATM project.

Information Technology will also play a key role in the faster, better, cheaper strategy. Technology will help reduce costs of doing business as well as improve on the predictability of the passenger journey – reducing stress and improving on the travel experience.

Beyond driving lower costs, technology can help exploit new market spaces, gain customers and also improve revenue at our airports. Airports may need to develop and conduct focus group sessions with stakeholders in the industry to brainstorm on potential ways that they can leverage on technology to open up new market spaces and also to develop new products and services. This should also not be lost on the drivers of the SAATM project as an implementation strategy.

Finally, the reality of competition should not be lost on us in Africa. While the aviation industry in Africa strives to improve and innovate, other continents are also not sitting down to watch. We must remember what happened to our textile industry when we opened our borders to second-hand clothes. We must ensure that agreements look both inwards and outwards, short term and long term before the continent commits to them. This will require us to invest both time and money to ensure that SAATM not only is real but pays off for all stakeholders.

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