IATA chief hits out at unfair taxation as Africa enters its 'century of flight'

IATA chief executive Tony Tyler said we could be entering Africa's century of flight.

“Africa is the second most populous continent and home to an estimated one-seventh of the world’s population. Yet it represents just 3% of global airline traffic. I view this is as a tremendous opportunity. Other air markets have matured or are in the process of maturing; for Africa, the future of aviation is still being created,” Tyler said in his keynote address to the AFRAA annual assembly held in Diani, near Mombasa Kenya.
“My message today is that by keeping and defending global standards at the core of our amazing industry we will build a future that is successful. There is no reason why the next 100 years of commercial aviation cannot become Africa’s century of flight,” he said.
Tyler hit out at governments who are weakening the integrity of the air transport system by introducing different and sometimes conflicting passenger rights regulations.
“At least 60 governments have introduced such rules and several more are considering imposing them. These go beyond the simple guarantees that governments should provide and what is imposed on other industries. The result is a patchwork quilt of different rules which are costly for airlines and confusing for everybody—including passengers,” he said.
He criticised African governments that have failed to follow the Montreal Convention (MC99) on electronic documents in air cargo such as electronic air waybills.
“This is very important for African states that rely on air cargo to transport high value, time sensitive cargo to markets around the world. But in order to use e-AWBs airlines need to ensure that both the origin and destination countries have ratified MC99. This is not the case in many parts of the continent. In fact, of the 88 countries that have not ratified MC99, the majority are in Africa. The African Civil Aviation Commission has urged states to ratify MC99 as did the recent 38th ICAO Assembly. We need airlines in Africa to engage their governments to ensure they understand that MC99 is a win-win for all stakeholders,” Tyler said.
African governments approaches to taxation are also hindering development of air transport across the continent.
“Many governments in Africa treat aviation as a luxury rather than as a vital enabler of development,” Tyler said. “Ethiopia, for example, imposes a tax on fuel uplift for international flights to support its stabilisation fund. This contravenes the Chicago Convention and ICAO principles.
“Mozambique and Tanzania recently implemented significant increases in air traffic control charges without consultation. We believe that these will eventually have detrimental effects for both. By engaging in a dialogue, we can often come to win-win solutions. Tanzania provides a good example. The Tanzania Civil Aviation Authority proposed steep increases in both air navigation and safety oversight charges. By engaging in a dialogue we agreed on a much more reasonable increase. And by working together going forward, I am confident that we can strike the right balance so that such charges deliver value for money.”
Tyler cited the hosts of the conference, Kenya for “misguided charges” which add unwarranted costs to airlines. .
“The new rail levy tax applied on jet fuel for international flights adds an estimated US $13 million to airlines’ fuel bills every year. The VAT applied on the KPC pipeline from Mombasa to Nairobi is another example that directly affects airline costs.
“We need to engage governments in a more robust dialogue so that they understand the consequences of such actions on the industry and ultimately on their economies. Buying aviation fuel in Africa is about 21% more expensive than the global average. So, for African airlines fuel accounts for some 44% of their costs—much higher than the global average which is about a third. That’s a heavy burden for airlines—limiting their competitiveness and their ability to provide efficient connectivity to people and businesses that depend on air transport.”