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Zawya
4 days ago
- Business
- Zawya
EAC's plan to ease cost of air travel
High taxes, fees and charges on airlines in Africa have been cited among the measures keeping air transport development on the continent aground. Air transport in Africa is still considered a luxury service, as governments tend to overtax the supply chain, leading to excessive service charges for the airlines. According to African Airlines Association (Afraa), the average amount of passenger's paid taxes and fees applied to air tickets is twice as expensive in Africa than in Europe and the Middle East. According to a study by Predictive Mobility, the elasticity price/demand for air transport within Africa vary from -2.34percent to -3.15 percent, meaning that a reduction of 10 percent on the ticket price can increase demand at continental level, from 22.3 to 30.1 million passengers annually. Thus, the reduction of taxes and charges can allow a significant stimulation of demand on the continent, help airlines to become more competitive against foreign operators, who are based in regions where the taxation is comparatively lower. Taxes vary within the region but, on average, constitute 25-30 percent of the ticket. For example, fares on Entebbe-Nairobi fluctuate between $300 and $350. Taxes on the route constitute about $100 for a return ticket. In East Africa, taxes and fees paid by passengers on regional departure in airports are: Kinshasa at $77.5, Entebbe ($57.2), Dar es Salaam ($54), Nairobi ($50), Mogadishu ($42), Bujumbura ($40) and Addis Ababa ($31). According to Afraa, Central and Western Africa have the best regional taxes policy, as they allow passengers to save on average $12.68 and $10.12 respectively. The initiative has been in development since 2006, with lobbies and businesses pushing for lower airfares, increased connectivity to ease travel and cargo transportation. Drafting of the framework has been ongoing under the Sectoral Council on Transport, Communications and Meteorology (SC-TCM). A report by the 18th meeting of the Sectoral Council shows efforts to domesticate the East African air space. Draft regulations for air transport market liberalisation have provided for aviation freedoms up to the fourth. But stakeholders are demanding that the region expedite the Fifth Freedom. The Fifth Freedom is the right of an airline to carry passengers and cargo between two foreign countries, as long as the flight originates or terminates in the airline's home country. The EAC draft regulations awaiting signatures from partner States allow regional air operators to 'exercise the services referred to as the first, second, third, fourth and fifth freedoms of the air within the community.''Partner states may, at their discretion, grant each other any other rights beyond the Fifth Freedom of the air,' the draft days. EAC Council of Ministers chairperson Beatrice Askul told The EastAfrican that the region was making good progress on the issue of air liberalisation.'The issue is part of our agenda as the council. We are making a lot of progress. ...there are specific ministries including Transport, Communication and Infrastructure, which are directly dealing with the liberalisation and the domestication of the EAC airspace,' she said.'Communication and consultation are still within that level of specific ministries consultation. After that, they will forward recommendations to the council to adopt, when they have all agreed on give and take.' Partner states will subsequently negotiate their regional air transport bilateral arrangements under the Multilateral Air Services Agreement,' said Ariik during the 19th Meeting of Directors General of Civil Aviation and Airports Authorities. But the partners have been reluctant to implement the Fifth Freedom, slowing down the efforts.'EAC members have been reluctant to liberalise their air services because they want to protect their airlines. Partner States think some of the routes are strategic for their national carriers so they are limiting full liberalisation on the Fifth Freedom,' said Adrian Njau, acting chief executive of the East African Business Council (EABC).'The Fouth Freedom -- the right to fly from one's own country to another -- is currently on, but it is not enough.'The freedoms of the air are international commercial aviation agreements, under the International Civil Aviation Organisation (ICAO) granting a country's airlines the privilege to enter and land in another country's airspace.'We want the EAC to grant the Fifth Freedom,' Mr Njau insists. Without an open skies regime in place, the EAC partner states have been relying on bilateral air services agreements to operate, presenting challenges of concluding multiple negotiations between several countries.'As a region we need to do away with bilateral agreements on air travel among EAC partner states because bilateral agreements are very restrictive. We want to make air travel domestic for EAC,' the EABC boss said. Part of the reason why air travel is expensive and cumbersome within the EAC and the rest of Africa is failure by countries to ratify and implement the Single African Air Transport Market (SAATM). Currently, Kenya, Rwanda, and the Democratic Republic of Congo are the only EAC countries that have fully joined the SAATM. Authorities in Kampala indicated that Uganda would join in this financial year.'We are left with approval by the Cabinet. Once that is done, we will be good to go,' said Fred Bamwesigye, director-general of Uganda Civil Aviation Authority at a meeting in Kampala early this year. To date, 34 countries have signed up to the SAATM representing over 80 percent of the existing aviation market in Africa. Even though the EAC concluded the regulations that would streamline the aviation industry, boost trade, promote tourism, and improve global connectivity, transport costs remain some of the highest in Africa.'We pay $3,000 for delegates for DRC (to fly from Kinshasa to Arusha), for instance, and less than $1000 to fly to Europe,' said Kennedy Mukulia, chairperson of the Committee on Legal, Rules and Privileges within the East African Legislative Assembly. Inside the regulations, plans are also underway to reduce fares.'The cost of airfare in the region needs to be addressed,' said Ariik. 'There is therefore a need to look into the possibility of harmonising the current regulatory fees and charges under the spirit of the EAC CMP and to consider and designate the EAC air transport market as domestic for EAC-registered operators and apply charges applicable to domestic parties and eventually lower passenger tariffs.'But a study by Africa Airlines Association in 2024, shows that airline passengers pay on average 3.5 different taxes, charges and fees for international departures, representing an average amount of $68. Taxes and fees generally represent more than 55 percent of airlines' most affordable base fares, and more than 35 percent of total ticket price. Given the low purchasing power in Africa, it is urgent to assess the issue of taxes. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
Zawya
15-07-2025
- Business
- Zawya
African airlines taxed out of reach for travellers
Carriers in East Africa have sounded the alarm over high taxes imposed by governments on goods and services in aviation, saying the levies are inflating ticket costs and stifling growth in an industry facing numerous challenges. The African Airlines Association (Afraa) says many countries in Africa have raised taxes on aviation in an effort to boost revenues and meet fiscal targets, but at the expense of air travel and the viability of carriers. In a report published last week, the lobby says a passenger departing from an African country pays an average of 3.5 taxes, charges and fees on international departures – about $68 – up from $66 in 2022. Anyone departing from Europe and the Middle East pays an average of 2.53 and 2.69 taxes respectively, valued about $30 and $34.'Aviation in Africa faces huge challenges related to taxes and charges, which affect airlines, passengers and economic growth,' Afraa said in the report.'High taxes, inconsistent policies and reliance on revenues can stifle the development of a competitive and sustainable aviation industry.'The report says many African governments are ignoring the International Civil Aviation Organisation's (ICAO) policies on taxation, imposing exorbitant charges on the sector. In addition to international departure taxes, more African countries have introduced transfer and arrival taxes, further inflating the cost of flying to and through the continent. Regional departuresAs of 2024, some 42 African countries applied transfer taxes, up from 35 in 2022, increasing ticket prices by an average of $34.40. Arrival taxes rose from an average of $14 in 2021 to $34.10 last year. Flights within the continent are not exempt. Since 2022, fees, charges and taxes on regional departures have risen by about $2 to $59.05, up from $57.40. While average taxes in Africa are already above international norms, some countries charge close to $300 in taxes and fees on global and regional departures. Gabon is the most expensive country to fly from, charging $297.70 for international flights and $260 for regional departures. Sierra Leone follows closely, levying $294 for the categories. In East Africa, the Democratic Republic of Congo is the costliest, charging $109.90 for regional and international departures – the ninth most expensive on the continent. On average, East African countries charge $63.32 in taxes on international departures and $52.82 on regional departures, ranking third after West Africa ($109.49 and $96.98) and Central Africa ($106.62 and $85.84). Four countries in the region charge $50 to $100, one charges between $100 and $150, two fall between $30 and $50, and two charge less than $30. Afraa does not specify charges by country except for the 10 most and least expensive. An analysis by the East African Business Council in 2023 also established that countries in the region have hefty taxes on international and regional travel, with some airports being among the most expensive on the continent to depart from. Juba Airport in South Sudan was the most expensive, with taxes amounting to 17 percent of ticket prices for air travel within the East African Community (EAC) and 11 percent within the rest of Africa. Uganda's Entebbe Airport and Burundi's Bujumbura Airport came second with taxes eating up 15 percent of ticket prices, followed by Nairobi's Jomo Kenyatta Airport and Julius Nyerere Airport in Dar es Salaam, at 11 percent, with Kigali Airport in Rwanda being the cheapest at eight percent. Aviation trafficAfraa says the continued rise in these taxes will suppress local demand for air travel and weaken tourism in Africa, which relies on aviation to transport about 56 percent of visitors.'Taxes and fees generally represent more than 55 percent of airlines' most affordable base fares, and over 35 percent of the total ticket price,' the report states.'Given the low purchasing power in Africa, it is urgent to assess the issue of high taxes to stimulate demand and make air transport affordable.'Indeed, air travel seems to be less developed and has less traffic in regions that have more taxes than in those with lower taxation on the industry, evident from the Afraa analysis. Of the 10 countries with the lowest aviation taxes for international and regional departures, four – Morocco, Tunisia, Algeria and Libya – are from northern Africa. All but one country from this region charge less than $50 in such taxes, according to the report. In contrast, only three countries from West and Central Africa have taxes of less than $50, while the majority charge more than $100 in international and regional departure taxes, not to mention arrival and transfer taxes on airline tickets. As most African countries grapple with debt sustainability and scramble for revenue, Afraa says indiscriminate taxation risks strangling industries critical for growth.'To foster greater air connectivity, economic growth and regional integration, it is important for African governments to consider harmonising tax structures, reducing excessive charges and pursuing alternative funding methods for aviation infrastructure,' the report concludes. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
