At the recent 19th Meeting of Director Generals of Civil Aviation and Airports Authorities of the East African Communities (EAC), partner states were urged to accelerate regulations, to liberalise the air transport market to boost regional integration and economic growth.
Liberalisation of the regional market has been in the plans since 2006 and is expected to lower the cost of air fares, stimulate demand for air traffic, connectivity, increase operation efficiency, reduce flying time and support the expansion of air transport capacities and the regional economy.
During the meeting, the EAC deputy secretary general in charge of infrastructure, productive social and political sectors-Andrea Agruer Ariik laid emphasis on the importance of an integrated air transport market for the development of the EAC region.
Through the removal of barriers to air travel, the region can enhance competitiveness and attract investment.
Loosening of restrictions on the EAC air transport market can result in exponential growth for the region. This means more business, more tourism and culture exchange.
The more efficient and accessible air transportation becomes, the larger the markets that can be serviced. However, for a long time, air transportation was a preserve of the wealthy and profitable businesses able to cater for flight and air cargo costs.
Major airlines in the EAC offer a wide range of services and flights to destinations, taking the lead in opening up the region.
While these are commendable steps to realising liberalisation of the air transport market in the EAC, and benefitting regional integration and economic growth, the cost implications cannot be avoided.
While revenue is essential for the maintenance and growth of these major airlines, air transport needs to be accessible and affordable.
On account of this, low-cost carriers in the EAC are the future of successful liberalisation of air transport in the region. These carriers, also referred to as no- frills, intervene with lower fares for passengers while minimizing costs.
They operate on a business model that ensures cost savings by utilising a blend of strategies not limited to, using a single fleet to lower maintenance and staff costs, fuel-efficient aircrafts, direct distribution with a focus on point-to-point routes, simplified services and charging extra for amenities like seat selection. What role do these low-cost carriers play in fostering regional integration and connectivity?
In the 1990s, the European Union (EU) began the liberalisation of air transportation. This move saw the creation of new routes and the development of low-cost airlines which emerged as an innovative business model.
The move resulted in air transport accessibility due to affordable airfares within the region as well as, growth in tourism.
No-frills have been influential in increasing short- haul travel within Europe, connecting various destinations and promoting the movement of people for business and leisure.
Up until 2015, low-cost carriers represented 48 percent of seat capacity in the EU, surpassing traditional major carriers. This growth has stimulated competition, leading to even lower fares and more choices for passengers travelling within the EU.
The development of low-cost carriers in the EU transformed their airline industry, resulting in a cascading effect on tourism, local development and the broader economy.
Their success in the EU has additionally influenced the size and location of airports. The point-to-point service of the low-cost carriers, as opposed to the hub-and-spoke system of major carriers, has facilitated decentralisation of travel and tourism.
The relationship between air transport and tourism is symbiotic. Majority of international tourists travel by air, and the availability of affordable flights through low- cost carriers has probably contributed to the increase in air travel's share of international tourism from 46 percent in 2000 to 58 percent in 2018.
Low-cost carriers can not only transform the airline industry but also impact tourism, local and regional development, and the broader economy.
The success of these carriers in the EU is a testament to the positive effects of market liberalisation on consumer choice and industry innovation.
Low-cost carriers in the EAC are the future for air transportation. They present an opportunity to open up the region with affordable fares making air travel accessible to all. Partnering with major airlines for transfers will further grow our tourism industry within the region and expedite the development of the region.
In conclusion, low-cost carriers within the EAC present a promising avenue for fostering regional integration and connectivity.
As they offer affordable fares and expand accessibility, these carriers can significantly boost tourism, trade, and economic development.
Consequently, the EAC must accelerate its efforts to liberalise the air transport market and create a favourable environment for the growth of low-cost carriers.
