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Lessons and Reflections on the Past Present and Future from Liberia

Aviation & Regional Cooperation in Africa

 

The Rise and Fall of Air Afrique                                                                       

By Alhaji G. V. Kromah

(BA, LL.B., LL.M., MA,, MAIR, SJD-cand.}

 

Posted  July 26, 2008

Written 2003

 

Abstract

The blend of the antelope and the horse, conspicuously engraved in green against a white background, was for several decades a shining symbol of African pride in the skylines. The engraving was easily identifiable on the continent and other global destinations as the logo of Air Afrique. The multinational airliner placed not only its West and Central African owners on the map of international civil aviation, but also represented the continent. When the airline folded in 2002 after 41 years of operation, it seemed to have dashed hopes for African regional cooperation in civil aviation. It cast doubts over the continent’s future role in an industry, already severely panting under the global effects of the September 11, 2001 hi-Jacking attacks on the World Trade Center and Defense Department in the United States. The devastating impact of the attacks only hastened the already crawling demise of the African airline.

Air Afrique was supposed to be a solution to the reality of uneconomic national airlines, but ironically today, its collapse is simultaneously producing exuberance and apprehension as new national African airlines emerge and old ones take expansionary moves to fill the void. The post Air Afrique intra-African rivalry is happening under the "open skies" liberal regulation policy the region is now officially pursuing, with skepticism nevertheless over lingering implications of competition with non-African airlines.

Founding and Rationale

When eleven West and central African countries concluded at the 1961 Heads of State Summit in the Cameroonian capital of Yaounde, a number of things was common to the signatories of the treaty setting up a joint airline. The states were all former colonies of France and had just acquired political sovereignty. The Yaounde meeting gathered all of the newly independent Central and West African former colonies of France, except Guinea, which was the first to obtain independence.

The relatively speedy move by the African states to undertake jointly a sub-regional enterprise may have come as a surprise, given that most of these countries were barely two years old and had just begun the rigorous task of self-administration. There was evidence that the move was not a miracle.

Even before independence, a number of the nations who founded or later joined Air Afrique, were already part of the grouping called the Council of the Entente, founded in 1959 under French auspices. Though still colonies, members of the Entente agreed to coordinate their economic activities, in addition to social and political alliance. Paris, probably more than most colonial powers, had aggressively promoted the notion of its African and other colonial subjects being part of the French "nation." West and Central Africans were recruited into the French armed services, and African politicians were admitted into the French National Assembly. So it was little surprise when the Yaounde treaty setting up the Air Afrique Corporation gave two French companies, Air France and UTA, a minority share and contracted the company’s first air four aircraft from UTA.

Beyond the French organizational and probably paternalistic inspiration for Air Afrique’s creation, there were stark realities. Ground and other transport infrastructures were lacking and created extra problems for landlocked countries like Burkina Faso and Niger. Their embryonic economies could not individually afford the establishment of state-owned national airlines, nor were there vibrant indigenous private sectors to begin scheduled commercial airlines. In their venture, the states could only aspire to cater to future markets, as even today the number of Africans who travel by air within the region remains prohibitive due to individual traditional fear of flying among the vast rural populations. The French and their fellow Europeans would remain engaged in the continent, and thus a transnational airlines that could do the local routes was economically and practically useful.

Regional integration and multilateral cooperation using the multiple benefits of aviation was certainly a culture and goal that both France and its ex-colonies saw blossoming in East Africa, previously controlled by the British. The East Africa multinational airline initiative preceded independence in the area, and for all practical reasons, the East African Airways was doing well. EAA had operated for fifteen years before the concept of Air Afrique was formalized in 1961. In comparison to the Yaounde signatories, there were only three countries in the EAA venture - territories before independence in the 60’s consisting of Kenya, Uganda, and Tanganyika and Zanzibar, the latter two combining into Tanzania later. EAA survived the sixties and seventies, and extended its wings with the flags of the three countries, going as far as the Middle East and Europe. Its presence in West Africa with its variety of aircraft must have had an encouraging impact on the West Africans in their quick move to carry out a similar project upon independence. The arrangement seemed to have been an economic and probably political illustration that indeed they had become sovereign states in West and Central Africa as well.

The Yaounde conference participants further established the sovereignty element as an international legal basis for the establishment of Air Afrique when they referred to the 1944 landmark Chicago Convention on International Civil Aviation. A key outcome of the Chicago Convention was the recognition that every nation had exclusive sovereignty over the airspace over its territory, such area being defined as the space above the state’s land and adjacent bodies of water. The Convention established the need for bilateral air service agreements between governments, and not carriers, to facilitate air services between any two nations.

What was equally important for the Heads of State in Yaounde, as specifically highlighted in the opening provisions of the Yaounde Treaty, was their proclamation that they were additionally acting in accordance with the stipulation of the Convention in its creation of the International Civil Aviation Organization, now based in Montreal Canada. Under that provision, the Convention clearly allowed for states to undertake joint air transport companies and air services on any routes or regions. The Yaounde Treaty specifically draws on state rights under the Convention to "participate in joint operating organizations in pooling arrangements, either through its government or through an airline company…. The companies may, at the sole discretion of the state concerned, be state-owned or partly state-owned or privately owned."

Despite the generous reliance on the Chicago/ICAO treaty rights, Yaounde did not seem to share the same immediate motivation of the Convention. Whereas Chicago in its opening premise dwelled on the prevention of conflict and abuse of the advantages of civil aviation, Yaounde focused on the benefits to be derived from mutual cooperation and friendship among states.

Development and Early Success

Air Afrique took off shortly after Yaounde and had chances of succeeding. The Treaty and the articles of corporation had virtually created a single airspace out of all member states and put it at the disposal of the airline. It was beyond the category of Eight or Ninth Cabbage aviation freedom rights, which enable an airline of a country to carry passengers from one point to the other in foreign country. It was constructively a True Domestic Cabbage, depicting the right of an airline to carry passengers from one point to another in its home country.

Each member country of the new corporation had a head office, and the airport ground handling in most instances, was relegated to Air Afrique. This gave the appearance of a domestic company in each of the member states. Cameroon became the first member to have Air Afrique service its internal routes, including Yaounde and Douala, illustrating one of the advantages of offering the de facto Cabotage rights. Cameroon was an exception though, as most African countries did not have more than the capital city developed enough to host scheduled flights of Air Afrique magnitude.

The intra-state flying opportunities also meant that Air Afrique was practically enjoying all other rights, especially the Fifth Freedom, hallmark of "Open Skies" arrangements. The Fifth freedom allows a carrier to take passengers from one foreign country to another.

The privileges accrued to Air Afrique were in effect monopolistic, even at the expense of national airlines, which were not prohibited but had to harmonize their operations in individual agreements with the multinational corporation. Desiring individual states could enter into agreements with other states, but it was agreed in Yaounde that the signatories would adopt common air traffic policies in negotiating with other states, considering the interest of Air Afrique in the resulting bilateral accords. Particular emphasis was put on avoiding any inter-state agreements that would be "prejudicial" to Air Afrique.

The Air Afrique state owners had things in common, but this did not include customs and tariff systems. The new company could have ordinarily faced enormous import duties, fees and surcharges trying to operate as a home carrier in eleven different countries. The issue was raised and extensively discussed in Yaounde, resulting into an inclusion in the treaty that all member states exempt the airline from a range of taxes and fees, including inscription and registration fees and customs duties on equipment required to operate the airline. Member states were also asked to allow easy transfer of funds in and out of their countries.

The Eleven West and Central African States evidently took the Air Afrique project not only as a symbol of unity among emerging African republics and an attempt to increase the level of interactions, but also as a serious investment. For today beyond the sub-region, most developing countries have investment codes that provide a variety of incentives for new industries and companies involved in the production of value-added goods and services. In Liberia, for instance, a separate government entity, called the National Investment Commission, is set up to attract foreign investors, and determine which set of incentives would be useful. Generally, companies involved in the manufacture of important goods are exempt from custom duties on imported equipment and raw materials, while some internal entrepreneurs are given monopoly or tax breaks to allow their young manufacturing companies to strengthen into a viable operation. These incentives are also based on whether the production would meet national consumption needs and increase employment.

The Air Afrique initiative seemed to have laid the groundwork for this kind of investment promotion, only that the economic entity was itself owned by the states. The Article of incorporation authorized a fixed capital of about $14 million with the member states buying about 60 percent of the shares. France, through its airlines, UTA and Air France, along with private investors and banks obtained the rest.

As early as three months after the April signing of the Yaounde Treaty, UTA leased 12 DC-4 aircraft to Air Afrique, and provided the pilots and most of the technical crews. Abidjan, the bustling Ivorian capital that could pass for the leading urban center of West Africa, became the main operating hub, though other member states had places they called their individual head offices.

Air Afrique kept up with contemporary aircraft and by 1973, it was operating DC10’s for both passenger and cargo. It got its Boeing 747s in the next decade followed by the Airbus A300’s and A310s. Other acquisitions included Boeing 707s, 737s and even the Russian Antonov 12.

With this array of aircraft, the airline quickly grew into a West African giant with its destinations going far beyond the sub-regions and the continent. Yaounde had given the airline the right to service non-member ship routes, including links outside of the continent, on behalf of the member states. Ten years from its inception, Air Afrique was now a regular on the transatlantic Dakar-New York route, and even had a ground handling arrangement with Pan-Am in New York. The Airline provided useful service on it Kinshasa-Abidjan-Monrovia-Dakar-NY path, emerging as the most dominant African airline. It was also visible along routes connecting other African English speaking cities like Lagos, Banjul, and Nairobi to cities in France, Italy and Portugal. Though founding members Gabon and Cameroon had withdrawn in the seventies, claiming geopolitical reasons, Gabonese and their neighbors in Equatorial Guinea could accept no substitute for their Air Afrique flights. Even the entrenched former British colony of Sierra Leone in West Africa applied and got membership into Air Afrique, following the withdrawal of Gabon, but the stay lasted for only one year in the late 1970’s.

Up to its closure, Air Afrique had invariably acquired and maintained holdings in national African airlines, including Air Burkina, Air Mali, and Air Mauritanie. It also had code-sharing arrangements with Air France, the newly vibrant and privatized Kenya Airways, MEA (Middle East Airlines) and TAP Air Portugal.

Many African and others travelling to the United States saw Air Afrique as a valuable option due to the non-stop Dakar-New York route. Airfares were also substantially less than the Western carriers’. The airhostesses attracted much admiration. Elizabeth Blunt, the famous BBC reporter, lamenting the financial quagmire the airline had run into later, said of the hostesses, "they were impeccably elegant, from their swept-back hair to their manicured fingernails." As for the onboard service, she could not hold back about how "the meals came with a choice of a French or African main course, red or white wine, and crisp bread rolls."

Except for the 1987 high-jacking of its DC-10 flight from Rome to Paris during which time the hijacker killed one of the 148 passengers, Air Afrique had one of the best safety records and made no distracting headlines, though financial troubles had begun to creep in. The carrier used its monopolistic success to branch out into aviation-related industries, running hotels and tourist resorts through its Hotafrica subsidiary. The temptation brought in globally established specialists of the hotel business, causing Air Afrique to later divest itself and focus only on aviation business.

Abidjan Airport particularly stood out seven years up to closure of the carrier as the greatest inter-African travel beneficiary. Almost two-thirds of the traffic was inter-African, and that was a financial advantage for AA, being the sole provider of ground handling services.

By its 25th year, Air Afrique’s passengers had grown from 300,587 in 1966 to 757,323 in 1985. According to the same source, the Airline made a turnover of 143,168 million CFA francs in the same period. (About 3.5-4 CFA to US$1 before 1994 devaluation.) The Airline had turned over no less than eight general managers/administrators by the time the Heads of State declared bankruptcy, with only two of them being non-Africans.

Throughout its operation, the monopoly conferred on Air Afrique by Yaounde in the very crucial West African market prevented any meaningful new entrance, but at the same time disguised the cumulative problems of the airline. Besides, the political will of 1961 seemed to have continued for practical reasons. The physical outlook of a multinational airline with destinations around the globe was a source of pride, and even more crucial was the issue of between 4000-6000 employees the corporation had acquired in various member states. The French-Speaking West and Central African states had grown as nations seeing and dealing with Air Afrique, and the airline had become part of their economic, political and social structures. People got jobs in Paris and other stations beyond their countries, providing new opportunities for them to educate their children in foreign institutions, besides the opportunity of travelling and living abroad. The Airline carried out a vigorous technical and administrative training program for its personnel in and outside of the continent.

So when its East African rival, EAA, began showing signs of crumbling in the mid 1970’s as a result of failing political will, Air Afrique was still basking in its initial success. The EAA ran into financial problems faced by the East African Community as a whole, a situation that was exacerbated by conflicts in East Africa. The airline was dissolved in January 1977, having operated for 31 years. It had also made name for itself around the globe, running routes to Europe, the Middle East, as well as in Southern and West Africa.

In the end, British Aircraft Corp. purchased the EAC’s VC-10 aircraft, and then resold them to the Royal Air Force, bringing the British inducement for an East African regional aviation adventure to a close. Was history to repeat itself in West Africa?

The Collapse

There are several accounts of how and when Air Afrique began slipping, but for sure most of its success had taken place in the first two decades following its creation. The 1980’s had begun to show cracks but those were matters the owners and certainly the managers thought were not insurmountable.

The bloated workforce constantly hovering between four and five thousand was certainly one key problem that could be surmounted, but not without political risks. The powerful labor union was around to ensure that its members didn’t get the "short end" of the enterprise. It was evident that the carrier’s administrative activities had turned into a quasi-government structure, with the eleven member states virtually forcing the employment of personnel as a matter of equal right. For every rescue plan introduced, the huge number of workers would immediately become a sore spot in need of cure.

Yet characteristically, this was the most tantalizing component of the covenant. The issue of workforce in any society, developed or developing, has always bordered on political sensitivity. With government clearly seen in charge of the airline, political leaders in the member states found it suicidal to announce an all-out retrenchment program. They left the issue of salary arrears and expert advice for a reduction of the staff to the managers. By 2001, basic salary arrears had accrued for various work groups up to 36 months.

Even more critical to the crippling status of the airline were a number of other factors. A bad airline purchasing deal said to have been concluded with French creditors by the only French general manager of the airline, Yves Rolland Billecart, continued to haunt the company. In an attempt to modernize the fleet during his eight-year tenure beginning 1989, Billecart opted to purchase four Airbus aircraft, with a financial package that required 12 percent interest over 10 years. Air Afrique analysts say it was possible to have gotten the deal at 6 percent over a 20-year period. But that problem might have been adjusted if the CFA had not been devalued by half in 1994. This actually doubled the value of the debt, which Billecart had contracted to pay in US dollars. The devaluation also doubled the airline's deficits and reduced the value of its income by half. The oil crisis created by the 1990 Gulf war could not have come at a worst time for the airline. In four years after Billecart’s airbus deal, the debilitating effects of the range of financial crisis had sent the carrier’s debt up to an estimated amount of 31 billion CFA (USD 51.7 million).

The late Ivorian President Felix Houphouet Boigny, who was virtually the doyen of French speaking West and central Africa, presented Billecart to the carrier’s board as the trusted expert that could salvage the airline, which was already facing some measure of financial problems. Four years earlier, employment had risen to more than 5,600. The outgoing Congolese Managing Director, Auxence Ickonga, a former Congolese foreign minister, unsuccessfully pleaded with the member states to intervene and cooperate.

The governments were certainly part of the problem. They had not only insisted on the huge personnel enlistment, but they were also helping to increase the company’s deficit. Air tickets were seldom paid for, and as a result, government officials accrued ticket arrears of more than 12.5 billion CFA. (7. 5 CFA = $1). Ickonga did not succeed with his new policy that tickets are paid for in cash while the arrears were being settled.

Billecart was expected to make a difference as a non-African and a citizen from minority shareholder and former colonial master, France. Paris shored up its son up by providing 37 billion CFA shortly before he took over. His initial moves included courageously cutting down the staff by 1600 somehow miraculously without mass resistance as compared to the fracas raised by his successors in attempting to do the same. Billecart demanded and obtained management autonomy from the state shareholders, and also demanded efficiency from his workers. The changes paid off for at least the first year when the company gained a profit of 366.6 million CFA. But this was all before the airbus fiasco, the gulf war and the CFA degrading.

Though the Airbus creditors were being paid about $500,000 a week, a debt-rescheduling plan collapsed, and the four planes were finally seized in mid 1998. The seizure began affecting the airline’s transatlantic hauls, though the remaining 11 aircraft continued servicing the much busier African network. Workers strike for salary arrears further exacerbated the woes. The resulting unbearable delays and cancellation of flights gave the notorious name of "Air Peut Etre" (Air Maybe) among passengers of the carrier.

Search for Help

In the next period up to last year, heads of state and top officials of member states met from capital to capital in desperate search of ways to rescue Air Afrique. Besides the now familiar chorus of downsizing labor, the focus now was privatization. The Board of Directors announced that it had consented to reduce its holding of over 50 percent to only a third. The heavy debt burden served as an impediment, and so member states were asked to settle one billion CFA each of the outstanding amount.

The Agency for Air Security in Africa and Madagascar, ASECNA, which operates a number of the sub-regions airports, was asked to bail the airline out with 20 billion francs. Only three of the member states paid, and ASCECNA was still delinquent. Even the workers began receiving sympathy from their colleagues in the sub-region. AA delegation of airline workers in the Togolese capital of Lome prepared a petition to present to French President Jacques Chirac to intervene. The new management headed by Senegalese Pape Sow Thiam was still on the forefront meeting groups in Dakar and Abidjan, and publicly vowing not to allow the airline disintegrate. Despite the soaring of the deficit from two billion to 4.2 billion CFA a month and inability to pay for the aircraft purchased by Billecart, Thiam announced that the carrier would soon purchase two airbus 330 aircraft to overcome the shortage. Top staff members began negotiating for early retirement.

A collective decision was made to involve the World Bank, in late 1998, and representatives of the Bank emphasized the need for privatization along a number of approaches. These included options that Air Afrique "create two distinct, private companies: one that services regional routes and the other for international traffic; the governments take steps toward the privatization of national airline while lowering restriction to international traffic; the governments move toward open skies by revising the Yaounde Treaty; and/or Air Afrique take the form of a privatized, regional company, operating under a protective set of regulations."

The Air Afrique governing Heads of State officially requested the Bank subsequently to assist in the restructuring program. The Bank convened a meeting in Washington in late 2000 with Ministers of the member states during which it was agreed the restructuring be carried out immediately and that privatization be done within two years. The Bank hired he SH&E Consulting company from New York to carry out the stabilization of the company within three months. This led to the deployment of Jeffrey Richardson, the former TWA CEO to proceed to Abidjan as the new boss of Air Afrique.

Based on findings by the consulting company and other studies, a spokesman of the Bank said the group submitted a summary finding for consideration by Air Afrique. Again, the Bank proposed, a) the liquidation of Air Afrique without the creation of a new company; re-deploy the traffic rights and encourage new entry in the market; and (b) Keep a regional company either by restructuring Air Afrique ("redressement judiciaire") or by liquidating Air Afrique and creating a new company. The member states were still left with the assessment report that they had to inject a huge capital themselves for immediate restructuring and privatization. The process was like starting all over as it was the lack of funds or unreadiness to disburse that caused the governments to ask for World Bank intervention in the first place.

The Heads of State, in the interim, extended the stay of Jeffrey Erickson, and asked him for advice as they sorted out ways of preventing the airline from total bankruptcy and liquidation. Erickson suggested that Air Afrique abandon its traditional route to Paris, and instead turn toward other parts of Africa as well as Asia and Latin America. He said this program could attract financiers. Except for Asia and Latin America, the suggestion was hardly a novelty, as Air Afrique had been flying the East and central African routes. In Asia and Latin America, Ethiopia Airlines and EgyptAir had already established themselves, and it was difficult to see how financiers would be motivated by the news of a failed African airline that could hardly service its own sub-regional network.

In fact while Air Afrique was declining as a regional and international giant despite its multi-ownership, the efforts of a number of national airliners on the continent were contradicting the theory that multinational approach was necessarily better. Ethiopian Airlines, Royal Air Maroc, and AirEgypt particularly stood out as flag bearers of Africa.

Ethiopia Airlines, which had started back in 1946 the same time as EAC with technical help from the now defunct American carrier TWA (Trans World Airline), was operating routes in West Africa, including Abidjan, Accra, Lagos and Bamako, as well as in its eastern neighborhood of Nairobi, Entebbe and Djibouti. It has also been a regular wing in southern and central Africa, boosting its external flights to New York and Washington; as well as London, Rome and other European cities. The story is the same to the Middle East and as far as China and the rest of Southeast Asia. In total, Ethiopian Airlines continues to quietly serve more than 40 international stations around the globe, with two-thirds of those flights in Africa. It is the only airline with almost daily East-West flights on the African continent.

Royal Air Maroc, which also flies to nearly the same destinations, reported a jump in its scheduled international traffic of about 8 percent compared to about 6 percent in the year 2000, and has struck alliance deals with Air France for cities in France and Germany, with Delta for Atlanta, Dallas, LA, Washington, DC, and other American cities, and with Iberia for Spanish cities.

AirEgypt, which is one of the world’s oldest set up in 1932, was reported as the first airline to own and operate jetliners in the Middle East. It was taken over by the government since 1952, changing its name from United Arab Airlines to the current one nineteen years later. It has one of the biggest domestic and international outreach, with more than 400 flights internally and over 100 externally.

Effects of September 11 Attacks and African Security

The financial problems of Air Afrique could not have heightened at a worst time than the period after the September 11, 2001 attacks in the United States when hijackers rammed planes into the World Trade Center in New York and the Defense Department in Washington, D.C. At the same time, unprecedented political instability and insecurity in the Cote d’Ivoire, the main hub of the airline, severely hindered rescue attempts for the carrier.

The attacks in the United States naturally created fear in travelers in America and Europe, as well as other parts of the world, though on a lower scale. But because the United States has about 40 percent of the global air traffic distribution, Europe and the rest of the world had to be impacted by any decline in US commercial aviation activity. Even after the Federal Government help of $5 billion in direct subsidy and $10 billion in loan guarantees, US airlines were still thunderstruck.

In the second quarter of 2002 alone, the biggest airlines in America had lost up to $1.4 billion, compared with $100 million they lost a year earlier. They were expected to lose $5b in 2002, having lost $12b the previous year.

In a study of the September 11 attacks repercussions for the airline industry, the International Air Transport Association (IATA) said global air traffic in 2002 was expected to drop by 3 percent, which it said was a result of decreased travel in the United States. The industry worldwide lost $18b and about 200,000 workers were laid off. Airline traffic will not reach pre-September 11 levels until the end of 2003. According to the report, full industry recovery won’t be possible under 2004. Though the Europeans have begun to show signs of improving faster than the United States, including a good showing by Air France, the Air Afrique partner and anticipated financier, the crippled industry was hardly a backdrop for the African airliner to expect a bailout.

On the other end of the trouble spectrum, the military takeover in Abidjan in December 1999 and the violent disruptions of commercial activity followed by a civil war which erupted in September 2002 only tended to spell doom for the badly troubled Air Afrique. With the Belgian airline, Sabena, going under and the momentary stoppage of Swissair during the same period combined to greatly reduce traffic at the Abidjan hub, diminishing ground handling income for Air Afrique. General insecurity in the Ivory Coast continued to suffocate the carrier.

Declaration of Bankruptcy

The Erickson proposal to isolate France backfired as the African nations did just the opposite, not forgetting that France was still a shareholder in the corporation. Workers demand played an important role in the Heads of State’s rejection of Erickson, who, like some of his predecessors, emphasized the need to reduce the work force by at least half in any privatization plan.

The workers in anger at one point stopped the former TWA boss from leaving the Ivory Coast. They demanded his stay until he offered them proposals that were more satisfactory. Tens of workers actually ran to the tarmac at Abidjan airport to stop the Air France aircraft carrying Erickson. That was the day after an Air Afrique crew had refused to take off with him. The employees claimed Erickson was hired to supervise the liquidation of the company, which they considered unfair and disastrous to their labor conditions. They said that if Erickson could not save his own TWA, why should they trust him with Air Afrique.

In a subsequent meeting, the Heads of State threatened to get rid of the American administrator as part of the new deal with France, but more so as a placation for the employees, whom they had indirectly hired at Air Afrique and were their political liability. The fact remained that the workforce was simply huge and needed steep reduction for any stabilization plan to materialize.

From a series of consultations on the overall problem, the Heads of State and France agreed on a privatization plan that confirmed the diminishing of state holding from now 68 percent to about 25 percent. France would increase its 12 percent to 35 percent, and the rest would be taken by non-government sectors. The privatization plan has now resulted into the final declaration of bankruptcy of the 41-year-old West and Central African giant that for real and imagined reasons effectively symbolized African regional cooperation. A new airline to be called Nouvelle Air Afrique (New Air Afrique) is to be established under the revitalization program.

Air Afrique has returned the remaining one of its 15 aircraft, and is still saddled with a total debt of $464m, including salary arrears of its 4200 employees. France, as the expected largest shareholder of the anticipated new airliner is at the same time demanding for the new carrier, certain monopolistic rights on the previous routes. The Heads of State are reluctant about France’s proposal, and have even said they are prepared to look elsewhere for new partners. Whether they would find them is another matter.

The creation of a new air transport entity would mean new articles of incorporation to replace Air Afrique’s. The loss of controlling ownership by the governments would imply that the Yaounde Treaty may have to be revisited to provide for the new arrangements, though member states have already revised the document to provide for the general acceptance of the notion of air transport liberalization on the continent.

Implications for Liberalization and Regional Integration

The fall of Air Afrique, though at some point seen as inevitable, defied the original objective of the 1961 Yaounde Treaty setting up the organization just as the demise of the East African Airways in 1977. It was envisioned by the signatories, heads of state of newly declared independent French speaking African countries, that multilateral venture was the way to go, particularly in critical areas like transportation. So the treaty was carved out to give the required authority and privileges for Air Afrique’s success. This included the allocation of air traffic rights, which essentially produced inflexibility for even bilateral negotiations with the member countries outside of Air Afrique involvement.

Yamoussoukro Declaration and Decision

Interestingly, it was in Yamoussoukro, Ivory Coast, the main base of Air Afrique, that African states met to explore ways of liberalizing the African civil aviation market. The resulting 1988 Yamoussoukro declaration meant the Yaounde Treaty on African Air Transport had to be adjusted to break the monopoly given the defunct Air Afrique. The rationale for liberalization, whose mainstay is the granting of Fifth Freedom rights wherein airlines are free to pick up passengers from one country to another outside of their home base, is that it will engender competition and enhance the economies of the continent.

Under the Yamoussoukro Declaration, African leaders agreed to take steps that would provide a safe and efficient air transport system on the continent and encourage private sector participation. Individual countries were to incorporate into their national aviation policies programs that would lead to the integration of air transport on the continent. Despite the bitter experiences of EAA and Air Afrique, multilateral and national airline organizations were encouraged in the Declaration to vigorously participate, with focus though on heavy private sector participation in these companies. Signatories were asked to cooperate in improving and standardizing their air transport infrastructures and facilities.

Little happened since the Declaration, prompting the 1994 meeting of African aviation ministers in Mauritius to renew interest and further commit states to implementation. Similar meetings were held in other parts of the continent. In its progress report covering the period up to 1997, the UN Economic Commission for Africa (ECA) gave a mixed result of cooperation and non-compliance among states, noting that there were still serious problems of granting traffic rights and the operation of cargo flights.

The UN body reviewed the performance of subregional groups in implementing the Declaration and found that West Africa, despite the creeping problem with Air Afrique, had taken concrete steps. West African ministerial coordination meetings specifically took decisions on the critical area of traffic rights. On Third and Fourth freedoms of the air, it was held that these rights should be given freely, provided the headquarters and main operating activities of the designated airlines are maintained in the country concerned, and "that the designating countries have at least a minority blocking vote to use as a veto where the third freedom is concerned."

On the crucial Fifth Freedom, the West Africans decided that it should be granted without condition in cases where airlines are not operating under the third and fourth freedoms. In addition, it was agreed that, "In cases where there are airlines operating the third and fourth freedoms, up to 20 percent of the traffic (based on the total volume of traffic of the preceding year) or of the number of seats available on the route, shall be reserved for operation under the fifth freedom, provided that 80 percent of the total traffic or number of seats available on the route are reserved for airlines operating the third and fourth freedoms." Where airlines were already enjoying third and fourth rights, the Ministers said the Fifth should be offered to non-African operators provided it is reciprocal in consultation with authorities in the sub-region.

West Africa also decided that traffic rights should be given to a maximum of two airlines in each state for passenger and freight service, and that tariffs should be determined on a basis of a flat rate policy which encourages state authorities to consider the operating cost. On flight frequency and aircraft type and capacity, it was agreed that each airline should have a maximum of five flights per week with the airlines harmonizing their open flight days; there was to be no restriction on the type or capacity of aircraft.

To crown all of the foregoing, West African Heads of State took the bold decision of declaring the entire sub-region as a single airspace, in preparation for a truly liberal air traffic market. This was in a way a wider application of the privileges Yaounde granted to Air Afrique. The ECA also referred to the activities of the other sub-regional organizations, including the Southern African Transport Coordination Conference.

Despite the specificity in the conclusion of rules of cooperation, implementation was still a problem. The difficulty particularly settled on the Fifth Freedom. States which had declared unreadiness to concede were given a an extended two year period up to August 12, 2002 when it would automatically be mandatory. Though most of the states accepted to implement the program, the ECA reported that there was still a lack of commitment and fears and that some governments and airlines were misinterpreting the liberalization program.

Though not cited as specific examples of this fear, the ECA narrated problems with South Africa’s experience with Zambia on third and fourth traffic rights in which South Africa was having problem in getting an increase of one frequency on the Johannesburg-Ndola route. South African Airways, which has turned out to be one of the most viable airlines on the continent servicing about ten cities on the continent, experienced a similar problem with Mozambique and Zimbabwe, both reluctant or unable to increase frequency of flights.

Intra-North Africa traffic was viable, according to the ECA. The countries freely gave each other traffic rights, the authorities said they had adopted liberal policies already. They however complained about not being sufficiently linked to other sub-regions because of the problem in obtaining fifth freedom rights. The North Africans were rejected in at least one of the Addis-Asmara, Bamako-Cotonou, Niamey-Bamako, and Cotonou-Abidjan routes. Besides, their request for cargo operations in West Africa was flatly rejected, despite the general agreement in Mauritius. The findings were the same in other regions of the continent, but all of these developments happened up 1997.

End of the Fifth Freedom Grace Period

African news media heralded the August 12 mature date last year for the granting of Fifth Freedom rights by all states, and though there was restrained joy in some quarters, there has been a groundswell in the campaign for liberalization for the past couple of years.

Kofi Henaku, a Netherlands-based lawyer of AST Legal Consultancy, has even created what he describes as "The Yamoussoukro Index," to monitor the progress and the downside in the implementation of the Yamoussoukro Decision, which is the affirmation by the African Heads of state to carry out the Yamoussoukro Declaration. In the first issue of the Index, achievements in the sub-regions include the creation of Air Senegal International, which was cited as a fine example of cross-border ownership between Senegal and Morocco. In East Africa, the AfricaOne airline was created to enhance positive competition with Kenya Airways, which having been privatized has been declared Africa Airline of the Year twice by its peers. From southern Africa, South African Airways took a stake in Air Tanzania, a move the Index considers a major intra-African cooperation. And from the North came the creation of Afriqiya Airline by Libya as part of its bid to spur the African Union, successor to the Organization of African unity.

Prospects and Challenges

It could not have been said better when Mark Tran of the British Guardian newspaper said in one of his pieces, "The airline business is precarious at the best of times. Airlines have to make huge investments in aircraft; they are at the mercy of fluctuating oil prices, and profit margins are tight."

The collapse of Air Afrique coincided with contradicting developments of hopes and disasters for Africa as part of the international aviation industry when considered in the milieu of the rivalry between the general financial woes inflamed by the September 11 attacks in the US on the one hand, and the beneficial potentials for the liberalization of the African air transport market. Whether the cumulative breakdown of the airline could have been avoided in the absence of September 11 despite the political implications of downsizing its huge work force is difficult to tell.

One definite gain was the political will demonstrated by leaders of the newly independent eleven West and Central African republics to espouse the concept of regional cooperation in practical terms. The airline lasted for 40 years, despite all the odds, owning from only four short-range aircraft to 15, including airbuses and the 747 jumbo jet. It represented Africa in Europe, America and other parts of the world, and made inter and intra-African air travel easier. The creators provided all of the legal traffic rights and safeguards as well as the necessary tax break to induce its growth. They created a single airspace over their territories and gave negotiating rights to the airliner, even at the expense of their own national carriers. The long period it took for the experiment to run into bankruptcy, when considered against the backdrop of the global calamity for the industry, it would be unjustified to say it was a total failure.

The experiences have provided ample lessons for the sub-regions to cope with the contemporary requirements of international aviation. With everyone watching the creeping difficulties of Air Afrique, governments, at least in Sub-Sahara Africa, began minimizing their equity in national airlines to avoid a similar problem. New carriers have been established, and new levels of cooperation between and among airlines and states can be seen. The inroads made through the privatization and revitalization by Air Senegal, Air Burkina, Air Madagascar and Kenya Airways have been remarkable, in addition to the steady operations of South Africa Airways as well as Ethiopian Airlines, EgyptAir and Air Maroc from the North. At the broader subregional level, the Economic Community of West African States is poised to draw lessons from Air Afrique. In their effort to establish another African multinational corporation to be called ECO-Air, the member states have decided they will have minimal government holding, the bulk going to the private sector. African businesses are being encouraged to participate.

The Yamoussoukro initiative for a new African air transport policy through liberalization and integration of activities are indeed fundamental in the drive to attain maximum efficiency and bring about the economic benefits of civil aviation to the people. The challenges remain in building trust, but most importantly capital, through shared activities. Mutual and collective undertaking on the principles of prudent business management with appropriate government regulation portends a progressive future for Africa.

The enthusiasm to extend the reaches of the continent’s flying capability internationally and pursue liberal policies at home should be based on a foundation of building a strong regional network. As one aviation expert put it, "the real threat to the continent is domination by foreign international players, and that no matter how well-meaning their involvement in the continent, Africa will always take second place to other objectives." Gary Tokoph of Inter-Air South Africa said African carriers owe it to themselves to integrate and cooperate urgently.

As Africa moves forward with the liberalization program, it must also prioritize the modernization of the associated infrastructure and facilities. Safety, punctuality and quality service, including frequent flyer programs, must all be considered as the package for stepping into the future. The continent must finally tie in these prospects with the need to maintain political stability, the sine qua non for economic and general prosperity.

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SELECTED REFERENCES

  • Oliver, Roland and Anthony Atmore, Africa Since 1800, 4th ed. Cambridge: Cambridge University Press, 1994.
  • Giles, Bridget, editor, Peoples of West Africa, New York: Diagram Visual Information Ltd, 1997.
  • Treaty on Air Transport in Africa, Establishment of Air Afrique, Yaounde 1961, ICAO Circular 98-At/19, 1970
  • Convention on International Civil Aviation, 1944, Chicago. ICAO doc 7300/4, 1969.
  • UN Economic Commission for Africa (ECA): Decision Relating to the Implementation of the Yamoussoukro Declaration Concerning the Liberalization of Access to Air Transport Markets, ECA/RCID/CM.CIVAv/99/RPT. Available at http://www.uneca.org/resources_home.htm
  • ECA Secretariat: Report on the Outcome of the 11th Meeting Of the Conference Of African Ministers Of Transport And Communications Held In Cairo, Egypt From 25 To 27 November 1997, Note by the Secretariat, available at http://www.uneca.org/eca_programmes/srdc/sa/publications/outcome_of_the_11th_meeting.htm
  • Abeyratne, Ruwantissa, I.R., The Future of African Aviation, in Journal of Air Transportation World Wide, Vol. 3, no. 2, 1998.

 

  • BBC News Online, Articles on Air Afrique, available at http://newssearch.bbc.co.uk/cgi-bin/search/results.pl?scope=newsukfs&tab=news&q=Air+Afrique+

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©  Alhaji Kromah Page 

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