Explanatory note on the meeting and annotated agenda

UNITED NATIONS

ECONOMIC AND SOCIAL COUNCIL

^FRENCHOriginal: ENGLISH Special Conference for African Ministers

in charge of Civil Aviation Yamoussoukpo (Cote-d'Ivoire) 6-7 October 1988

EXPLANATORY NOTE ON THE MEETING AND

ANNOTATED AGENDA

,*•«"■.

E/ECA/TRANS/TS1

1. Air Transport remains an important tool for stimulating social and economic development in Africa as elsovhere in the world, However, its benefits have often not

been realised in Africa because of its fragmented and v/eak nature*

2, By virtue of the international character of air transport, decisions and actions taken in one part of the world may have repercussions elsewhere. Such is the case with the deregulation of the airline industry, which was1 initiated in the United States of

America in 1978 and in response to which cbe countries members of the European

Economic Community, following the adoption of the Single Act of 1986 which created a single European airspace, have embarked on a programme of liberalising airline

operations within Europe,

3= The consequences of deregulation in the United States of America have been both positive and negative. Among the positive ones can be mentioned lower fares, greater flexibility in scheduling, increased traffic and greater efficiency in airline operations due to the removal of government restraints. Oh the other hand, there have been negative consequences such as the collapse of some airlines, the inability of air traffic control services to cope with increased traffic v/ith the resulting lowering of safety standards, and congestions at airports, One of the most significant results of the deregulation process in the United States of America has been the merger of airlines that are, by African standards, already large, into even larger carriers^ the so-called mega carriers.

4. The decision of Europe to work towards the liberalisation of the air transport

industry will have significant consequences for Africa as Europe constitutes the major market" for Africa's long-haul air traffic. The decision to abolish national frontiers by

1992 implies a single airspace in which carriers will have the freedom to operate without

regulation as to the destination they may serve within Europe; aircraft type or capacity,

fares, and frequency,

5..' The tendency towards mergers among European airlines is already becoming

apparent and, as a result of such agglomerations, European airlines much bigger than the present ones will operate into Africa in the near future.

6. Even at their present size., European airlines are proving difficult to compete

against for African airlines either on the Africa-Europe routes or routes within Africa

on which European airlines exercise fifth freedom traffic rights,

7= A second challenge facing African airlines is the need to modernize their fleets

in order to conform to the requirements of chapters "2 and 3 of Annex 16 of the Chicago

Convention of 19445 regarding permissible noise levels at'airports. The application of

the new noise abatement standards by European and American airports in 1988 has resulted in African airlines lacking equipment that meets these noise restrictions being excluded from these airports*

Oo The cost of re-equipping African fleets is very high and only very few airlines can afford the purchase of the new generation of wide-bodied aircraft. For the majority of small airlines, they will be condemned tc the continued use of obsolete aircraft, a fact which will limit their market access in other parts of the world,

9. A third challenge for Africa is the emergence of giant computer reservations systems in international airline operations. Either controlled by a single American mega carrier or by a consortium of large European airlines, these . systems have had a revolutionary impact on product distribution in the airline industry, YJith their well- known display bias in favour of the airlines owning them and the influence they exert on travel agencies to favour the owner-airlines in route selection, they pose a challenge of major proportions for airlines that do not have a stake in their ownership.

10. Airlines world wide can no longer afford to operate without access to a computer reservation system, and yet for airlines that have no stake in the ownership of such a system, they become junior partners '-/hose flights are displayed only after those of the owners. European carriers have already responses to the threat of market domination by American mega carriers owning computer reservation systems by grouping together to establish their own systems, while airlines of Couth-East Asia are embarking on a similar venture.

11. There is a pressing need for African airlines to co-operate in the establishment of their ov-m computer reservations system in order to protect their share of the international market*

12. In the post-independence era natioenl airlines have been important symbols of statehood and have played a significant role in national development and the economic integration of isolated regions in the absence of a developed surface transport. While for the foreseeable future national airlines will continue to have a great importance for national economic integration, their future for international air transport is very precarious in the face of overwhelming, competition from much larger airlines from

outside the region/ ' \

13O African airlines, are. almost without exception, operating at a loss and are a considerable drain on i/;oir countries' meager foreign exchange resources. If they had had positive operating results as in the rest of the world, the resources required to keep them afloat could have been used for urgent development activities. \ 14. There is an urgent need for a fundamental restructuring of the African airline industry so as to eliminate insufficiency and waste and to build up consumer confidence*

E/ECA/TRANS/75 Page 3

■■15. Given an international environment that is becoming increasingly hostile to the

operations of small airlines, African airlines face a real threat of extinction unless concerted action is ta?--en immediately to secure their continued existence. In this connection., it is clear that without the political will to save them by means of concentration of their resources into larger, more efficient and competitive units, they

will not be abk to withstand the onslaught of competition from extra-African carriers,

16. In view of t*"ese considerations tho sixth meeting of the Conference of African Ministers of Transport, Communications and Planning held in Kinshasa, Zaires from 23 to 24 Inarch "l?SS, requested the Executive Secretary of ECA, in resolution E/ECA/UNTACDA/Res. 88/67, to convene, as soon as possible? a special conference of African Ministers in charge of civil aviation v/ith a view to adopting a common African aeronautical policy. The present meeting has been convened in response to that resolution.

NOTE ON- THE AGENDA

There will be a meeting of heads of delegation before the opening for consultations

C^ on the draft agenda and on the composition of the bureau,

1. Opening

During the opening session, statements will be made by the representative of the host country, the Executive Secretary of the EGA and the Secretary General of

the GAIL

2, Election of the bureau

The meeting will elect a bureau consisting ofs - Chairman

- Vice Chairman - 2 Rapporteurs

C3o Introduction and discussion of the experts' report and the draft Declaration.

The Chairman of the experts' meeting will introduce a report on that meetings deliberations on four documents dealing withs

(a) The International Air Transport Environment and Basic Principles for African Air Transport^

(fc$ Guidelines for a new Air Transport Policy?

(o) Airlines Ivlorgers;

(d) Financing of Air Transport Activities

TJie Ministers will also have before thsm, for discussion and adoption the draft of a declaration on a new Africa aeronautical policy prepared by the experts.

4, Any other business . ,

The Ministers may raises under this item, any matters not previously dealt with, which is related to the business of their conference^

5. Adoption of the report and the Declaration

The meeting will adopt its report as well as a Declaration on a new African aeronautical policy-

8, Closure of the meeting

During the closing session, statements will be made by the Executive Secretary of ECA and a representative of the host country.