IATA DG: High operation cost killing African airlines
…lauds Nigeria, Egypt for clearing block funds
The Director-General of International Air Transport Association (IATA), Alexandre de Juniac, has attributed the death of many African airlines to high cost of operations and debilitating infrastructure in the continent.
The IATA chief disclosed this to Woleshadarenewsat the just concluded IATA Global Media Day in Geneva, Switzerland.
He called on governments to help lower cost of operations for airlines, saying it has a negative impact on the continent’s carriers.
His words: “We have always said this. We must lower the cost of operating in Africa. It has a negative impact on African airlines. The infrastructure has to be efficient. It is also a problem for African airlines because the infrastructure is not efficient as it should be.
“The regulation practice is another one. We have to convince African governments to let the operators operate, which is not easy, because they are usually state-owned companies specific to Africa that we have got in many parts of the world. It is not always easy to set up an airline in Africa and some other places because of high operational costs and taxes.
In Nigeria, airlines are boxed into tight corners because of huge taxes, charges and other costs like the high price of aviation fuel, which is highest, even in some oil producing nations.
Heavy taxes government impose on airlines, the tax on aviation fuel and other types of charges are invariably passed to the passengers, skyrocketing air fares.
But beyond the high taxation and government’s perception of air travel as luxury, aviation is underdeveloped in most parts of Africa.
In Nigeria, there is high potential that air transport could multiply the number of people currently engaged directly and indirectly in the aviation sector and also the resources generated therein, but government need to provide fillip for this potential to be realised.
The IATA DG also spoke eloquently on problems of baggage loss, disclosing that a new RFID technology has led to the mismanagement of luggage, which, he said, cost airlines billions and hundreds of millions of dollars, adding that for seven years period it cost airlines $3.5 billion.
ill bring $3.5 billion savings. It is a major improvement in the economic and financial situation of airlines in implementing the RFID programme.
“It is something that will not be paid for by the airlines because it is basically something for governments and for security agencies. It will significantly improve border control and security. If you ease this type of thing, it cost less. We need to convince governments on two things on technology and from there, we are on good track.
“Biometric will be the technology to support, which was not the case two years ago. Now, there is general recognition of technology. Second point is to convince government with the same set of data. What type of data do you need to be efficient with security control? I had to convince them. It is not a done deal yet.”
He lauded Nigeria and Egypt for releasing over $1.2 billion airlines’ blocked funds, but appealed to Angola and Sudan to speed up clearing of the backlog.
De Juniac admitted that IATA had seen significant improvement in Africa pertaining to blocked funds, saying: “Egypt has been solved; Nigeria has been solved. Others are in the process of reducing blocked funds.”
He listed Zimbabwe, Angola and Sudan as countries in Africa where they still had problems, stating that even in Angola they have significant reduction of blocked funds to $150 million.
“When I went there in January this year, we were above $500 million. Things are significantly improving in Africa. The most terrible situation is not in Africa, it is Venezuela where we have above $3 billion. It is a hopeless situation at this stage. It is total disaster. IATA is very active in Africa because we have the expertise. We try to fulfil our mission anyway,” he noted.
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