Lessons for Nigeria as Ethiopian Airlines leverage ‘open skies’

As Ethiopian Airlines continues to leverage its air network for vaccine distribution across the world, there are lessons for Nigeria and other African countries still lagging behind in the race for open skies agreement.

Open skies agreement is a treaty signed between countries to enable airlines to fly without restrictions.

BusinessDay’s checks show that just by leveraging its open skies agreements, Ethiopian Airlines has transported over 50 million doses of vaccines to more than 28 countries across the globe since COVID-19.

The airline is the only African carrier to reach such a milestone playing a crucial role during this pandemic period.

Four years ago, Nigeria signed Single African Air Transport Market (SAATM) treaty, also known as open skies to enable African airlines to fly without restrictions and change the narrative of Africa operating only two per cent of global air traffic but the Federal Government and airline operators have continued to drag its implementation.

Seyi Adewale, chief executive officer – Mainstream Cargo Limited told BusinessDay that the need for COVID vaccines distribution within Africa necessitates one-sky (otherwise called open skies) within Africa.

Adewale explained that if Ethiopian Airlines was missing out on the distribution of vaccines, there would have been very expensive options that could cause massive delays in distribution, limit equitable distribution, reduce vaccine expiry date leverage and many other issues.

He further explained that one alternative would be to use chartered (specialised) flights that would need the signing of different contracts with each countries that are divided by Anglophone, Francophone, Portuguese and other alliances.

He noted that Ethiopian Airlines already has a wide network within Africa with huge aviation infrastructure that includes sophisticated temperature-controlled refrigerators at its Addis Ababa headquarters, adding that the airline was able to rapidly respond by converting its passenger aircraft to meet the cargo, vaccine and other needs during the peak of the pandemic.

“Africa has been very limited in achieving its potential because of mistrust between constituent states, pervading insecurity, language/colonial barriers, military incursions, and many more. With open skies when fully adopted by the states, then we would have good intra-Africa integration that enhances good connectivity amongst states, allows for fair competition, enables strategic state partnership, facilitates trade & investments,” he said.

Open skies will also allow cultural integration and bonding, increase the potential of frontier markets to become more developed, keep funds and investments within Africa, reduce the influence of developed countries controlling Africa finances and prosperity that could in the long term lead to a single acceptable African currency etc,” Adewale said.

According to aviation stakeholders, open skies would make airlines more profitable via increased new route development and frequencies, creation of new hubs across regions, training and skill exchange or transfer and Ethiopian Airlines is leading in this regard.

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Ethiopian Airlines is establishing its presence in more than six African countries through its open skies strategic partnership with the local carriers, making it a dominant player in the continent.

The move is set to give East African carriers such as Kenya Airways a run for their money.

Kenya Airways will particularly feel the pinch as increased competition will likely make it harder for the national carrier, which is in a deep financial mess, to fly back to profit territory, not to mention its goal of reclaiming its lost glory as the “Pride of Africa”.

The Addis-based carrier is also involved in starting a new airline in Zambia, which is expected to be up and running next month. Ethiopia will hold a 49 percent stake while Zambia will have a controlling stake of 51 percent.

“We just signed an agreement with the government of DRC, which owns 51 percent of the airline and 49 percent is with us,” said Tewolde GebreMariam, the airline’s chief executive officer in an interview with an aviation online magazine.

Ethiopian Airlines also plans to restart operations of the Mozambique carrier after terminating the services in May due to the negative impact of the COVID-19 pandemic on the aviation sector.

Ethiopian Airlines has strategic partnerships with ASKY in Togo, Malawian Airlines and Chad-based Tchadia Airlines. It also has a management contract with Ceiba Intercontinental in Equatorial Guinea.

Ethiopian Airlines signed an interline agreement with Johannesburg-based Airlink. The Airlines says that its contract with Airlink will allow passengers seamless travel on a single ticket on any of the two carrier’s networks.

DRC, which has for years been underserved by airlines, has recently recorded an increase in the number of carriers that have launched flights on the route.

The airline is taking advantage of the huge opportunity the African market has to offer, and the rising demand for air connectivity in the region.

Olumide Ohunayo, an aviation analyst, said implementation of open skies for Nigeria and some African countries have been a challenge because of pride.

“For those who want to participate, the key thing is for every country to begin to develop an airline or go into alliance with countries that have big airlines. It should be a win-win. We need to throw away pride. We must be able to integrate with other airlines within the region.

“I commend Ethiopian Airlines. During the pandemic, they were able to look inwards. They converted some of their passenger aircraft, so they can move cargo. They were able to help other African countries by shipping the vaccines and other materials needed to fight COVID-19,” Ohunayo said.

He said Nigeria’s aviation industry is still developing and may not directly benefit if open skies was already in force.

He, however, noted that the country is beginning to witness massive investments in the sector that will gradually gravitate it to begin to be a major beneficiary if these investments continue, the government continues with its airport concessions plans and make the country’s aviation industry more private-sector driven.

To date, 35 of 55 AU-member countries have signed up to SAATM. They are: Benin, Botswana, Burkina Faso, Cabo Verde, Cameroon, Central African Republic, Congo Brazzaville, Cote d’Ivoire, Egypt, Ethiopia, Equatorial Guinea, Gabon, Gambia, Ghana, Guinea (Bissau), and Guinéa.

Others are Kenya, Lesotho, Liberia, Mali, Morocco, Mozambique, Namibia, Niger, Nigeria, Democratic Republic of Congo, Rwanda, Sénégal, Sierra Leone, South Africa, Swaziland, TChad, Togo and Zimbabwe. These countries represent over 80 percent of the existing aviation market in Africa.

But the few African countries that have strengthened operations for the execution of SAATM are Ethiopia, through its Ethiopian Airlines; Kenya via its Kenya Airways, Togo through Asky and Rwanda via RwandAir.

The International Air Transport Association (IATA), a clearinghouse for 290 global airlines, estimates that opening up Africa’s skies will promote the value of aviation throughout the continent, boost traffic, drive economies and create jobs.

IATA survey says if just 12 key African countries opened their markets and increased connectivity, an extra 155,000 jobs and $1.3 billion in yearly Gross Domestic Product (GDP) would be created in those countries.