Angola’s $500M debt to airlines is troubling, IATA says
The International Air Transport Association (IATA) forecasts a rise in the size of Angola's air transport market to 7.1 million passengers a year by 2036 at the forecasted annual growth rate of 6.7%. However, even faster growth with greater socio-economic benefits for Angola could be achieved if the country opens up its market and prioritizes its participation in the continent-wide connectivity efforts, unblocks funds, consults with industry to improve infrastructure and maintains world class safety standards, IATA believes.
"Aviation is vitally important to Africa. It currently supports 6.8 million jobs and contributes $73 billion in GDP across the continent. It connects people and businesses, enables trade and tourism, reunites families and friends, carries products to markets and vital medicines and aid to communities where they are needed. Angola needs to work with industry to ensure that it is prepared to reap the future benefits of increased air connectivity," said Alexandre de Juniac IATA's Director General and CEO, at IATA's Aviation Day in Luanda, Angola.
De Juniac identified four pressing concerns in Angola and Africa which governments and industry stakeholders must address for a healthy and strong aviation system. They are:
Blocked funds and denied access to foreign exchange in Africa is an increasing problem. In nine African countries, international carriers are unable to repatriate their foreign currency earnings, while locally-based airlines experience difficulties making on-time foreign currency payments to their suppliers and business partners. "Angola and other countries blocking funds are undergoing significant economic challenges. But blocking airlines' funds is not the answer. It is in everybody's interest to ensure that airlines are paid on-time, at fair exchange rates and in full," explained de Juniac.
"IATA, with the industry, is working closely with the governments of Angola and other countries on ways to make these withheld funds available. We welcome the commitment yesterday by Angola's National Bank to work with IATA to find a practical solution to release blocked funds," he added.
The second priority de Juniac mentioned is improving connectivity. Enhanced connectivity will stimulate demand and competition, making air travel more affordable and in doing so, enable higher volumes of trade, tourism and commerce between Angola, her sister nations and the rest of the world.
IATA's recent study found that if 12 key African markets, including Angola, were opened up, an extra 155,000 jobs and US$1.3 billion in annual GDP would be created in those countries. In Angola, the benefit would be an extra 531,000 passengers taking to the skies, the creation of 15,300 new jobs and the generation of US$137 million in additional GDP.
IATA welcomes the imminent launch of the Single Africa Air Transport Market (SAATM) by the African Union later this month. "By implementing the SAATM, Africa has the potential for remarkable social and economic transformation, but it is up to the industry and every African government to fully embrace and put the project into action, if the full benefits of aviation are to be realized across Africa. We urge Angola to join the SAATM and not lose out on the many opportunities of a connected continent," said de Juniac.
Efficient Infrastructure Expansion
Modern infrastructure is critical for aviation to deliver its economic and social benefits. Luanda's new international airport will play a major role; however consultation is needed to ensure that it is aligned with airline requirements.
Airlines need airports that match demand with capacity while delivering the functionality, levels of service, and efficiency to support operations and customer experience requirements now and in the future. All of this must be delivered in a cost-effective manner. Unnecessary capital investment leads to higher costs for airlines, which translate into higher costs for passengers, resulting in reduced demand for air travel.
"Getting it right is critical, which is why we encourage Angola's authorities to engage with airlines as early as possible, so that user needs can guide the airport's development. Among the items at the top of this agenda is the establishment of a charges consultation process in line with the framework of the United Nations International Civil Aviation Organization's (ICAO) recommended practices. Working together with users in a transparent and fair process is the best way to ensure the new airport's success," said de Juniac.
Safety is critical and has always been a challenge for Africa, according to IATA. With governments and industry working together significant improvements have been achieved. In 2016, for example, there were no fatal accidents or hull losses involving sub-Sahara African scheduled airline services. To sustain and further improve this safety performance, continuous effort based on global standards and best practices is needed.
Global standards underpin aviation safety. A good example is the IATA Operation Safety Audit (IOSA). There are 33 sub-Saharan airlines on the IOSA registry—including TAAG Angolan Airlines. In 2016, IOSA registered airlines' safety performance was twice as good as those carriers which are not IOSA compliant and this trend continues to improve. Measured between 2012-2016, IOSA registered African airlines performed 7.5 times better than non-IOSA carriers.
As a global standard, IOSA can deliver enhanced safety benefits when adopted by governments as a requirement of their safety oversight and licensing processes and we urge Angola to follow this approach.
In parallel, de Juniac urged the Government of Angola to continue working to improve and enhance its compliance with ICAO's safety regulatory framework. To date only 24 African states have implemented at least 60% of ICAO's Standards and Recommended Practices. Safety is a government responsibility. IATA is ready to support Angolan efforts to join this list.
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