The Single African Air Transport Market (SAATM), an ambitious initiative of the African Union (AU) under its Agenda 2063, aims to revolutionise the continent’s air travel sector by creating a unified air transport market. Launched in 2018, SAATM seeks to liberalise civil aviation across Africa, transforming it into a single market through deregulation and the opening of regional air markets to transnational competition. This initiative represents a significant shift from the traditional point-to-point model that has long constrained air travel within Africa, resulting in limited direct flights between countries and prohibitively high fares.
For decades, the rigid point-to-point model has hampered both business and leisure travel within Africa. Direct flights between African countries have been sparse and costly, presenting significant barriers to intra-continental travel. The SAATM aims to dismantle these barriers by granting airlines the fifth freedom of traffic rights. This critical provision allows airlines to operate flights that pick up and drop off passengers in third-party countries not their own, thereby facilitating greater connectivity and competition.
Since its inception, 37 countries have signed up to SAATM. These nations, including major players like Egypt, Ethiopia, Kenya, Morocco, Nigeria, and South Africa, represent over 80% of Africa’s existing aviation market and 67% of AU member states. The commitment of these countries is crucial for the success of SAATM, given their substantial market share and strategic geographic positions.
The primary objectives of SAATM are to enhance air connectivity across the continent, reduce journey and waiting times for passengers by over 20%, and stimulate competition among air services, leading to fare reductions. Additionally, SAATM aims to contribute significantly to the growth of Africa’s tourism industry and job creation in both the aviation and tourism sectors. By eliminating the need for separate Bilateral Air Service Agreements (BASAs) between individual countries, SAATM simplifies regulatory frameworks, thereby fostering a more integrated and efficient aviation market.
A study by the International Air Transport Association (IATA) suggests that if just 12 key African countries were to open their markets and enhance connectivity, an additional 155,000 jobs and $1.3 billion in annual GDP could be generated. Liberalisation, through increased air service levels and lower fares, is expected to stimulate additional traffic volumes, thereby facilitating tourism, trade, investment, and other economic activities. This, in turn, can lead to enhanced productivity, economic growth, and increased employment opportunities.
There is ample evidence that liberalisation of international air markets yields substantial benefits for passengers and the broader economy. For instance, a study of the European Union’s single aviation market revealed that liberalisation had significantly increased competition on many routes, resulted in the operation of numerous new routes, and led to a 34% decline in discount fares in real terms. Other studies have demonstrated a correlation between increased air traffic and growth in employment and GDP. One such study estimated that a 10% increase in international air services could lead to a 0.07% increase in GDP, translating into millions or even billions of dollars in incremental GDP.
Historically, African countries that have embraced liberalisation have reaped considerable benefits. For example, a more liberal air service agreement between South Africa and Kenya in 2000 led to a 69% increase in passenger volumes on the Johannesburg-Nairobi route. Similarly, allowing a low-cost carrier service between South Africa and Zambia (Johannesburg-Lusaka) resulted in a 38% reduction in discount fares and a 38% increase in passenger traffic. Ethiopia’s pursuit of more liberal bilateral agreements has contributed to Ethiopian Airlines becoming one of Africa’s largest and most profitable airlines, with passengers benefiting from 10-21% lower fares and 35-38% higher frequencies on intra-African routes compared to more restricted routes. Furthermore, the 2006 Morocco-EU open skies agreement led to a 160% rise in traffic and an increase in the number of routes between points in the EU and Morocco from 83 in 2005 to 309 in 2013.
Despite the promising outlook, the journey towards a fully integrated African airspace is not without challenges. The African aviation market faces significant hurdles, including high user charges and taxes, inadequate airport infrastructure, an unfavourable regulatory environment, undercapitalisation of African airlines, and insufficient management expertise. These factors have contributed to the low profitability of African airlines and present substantial obstacles to the realisation of SAATM’s goals.
Additionally, some African governments and airlines have expressed concerns that the agreement could lead to market domination by a few major airlines, potentially stifling competition. Nevertheless, there has been progress; fifth freedom traffic capacity in Africa increased from 15% in 2018 to 19% in 2023.
Currently, Africa accounts for less than 4% of global aviation traffic. However, with a population exceeding one billion, the continent’s share of global traffic could rise to more than 10% with a fully operational SAATM. The potential economic and social benefits of a unified African air transport market are immense, promising to enhance connectivity, stimulate economic growth, and foster greater integration across the continent.
