-doing business in the region.
According to findings from the latest policy paper by EABC, Costs and Benefits of ‘Open Skies’ in the East African Community, air-transport liberalization is set to lower flight costs by 9% and see a 41 per cent increase in flight frequencies.
EABC chief executive officer (CEO), John Bosco Kalisa said report shows that despite the commitments of the EAC partner states at the international level specifically on the Yamoussoukro Decision (YD) on liberalization of access to air transport markets in Africa and EAC integration efforts through the common market, the domestic air transport sector remains protected, reducing accessibility and increasing air transport cost at the expense of potential users.
“Liberalisation of air services in the region is set to increase traffic volumes, improve connectivity and lower air transport fares. This will in turn increase trade and tourism, inward investment and productivity growth,” he mentioned
Kalisa urged the EAC partner states to waive landing fees, excise duty on aviation fuel, navigation, landing, parking and COVID-19 related fees to see a reduction in operating costs.
“To encourage imports by air, EAC partner states should waive all import duties and Value Added Tax (VAT) by air during the COVID crisis” he stated
The policy paper also recommends for the EAC partner states to provide subsidies for the aviation industry in the form of direct financial support; loan guarantees, corporate bonds and tax reliefs.
EABC also encouraged EAC partner states to grant each other the free exercise of the rights of the first, second, third, fourth and fifth freedoms of the air on scheduled passenger, and non-scheduled passenger, cargo and/or mail flights performed by an Eligible Airline to/from their respective territories.
“By removing foreign restrictions, EAC partner states will be able to attract private sector investment, this will open up access to capital and avail investment in infrastructure upgrades and capacity expansion for regional airports,” he advised
The paper also revealed that COVID-19 has seen a drop in the tourism sector. In 2020, EAC received about 2.16 million international tourists compared to about 7.05 million in 2019. International tourist receipts dropped from USD 6.1 billion in 2019 to about USD 1.9 billion in 2020.