Nigeria signs AU treaty to reduce rules for African airlines

Nigeria and 22 other African countries have begun an open air policy that will relax aviation rules and regulations to create a free market environment for eligible commercial airlines.

The Single African Air Transport Market (SAATM) was inaugurated on Sunday at the African Union Summit in Addis Ababa, Ethiopia.

A free market is one where the government imposes few or no restrictions and regulations on buyers and sellers.

In a free market, products are available, while the prices at which they are offered are determined by demand and supply.

Government intervention, in form of taxes, quota and tariff does not exist or is minimal.

This means that airlines from these 23 countries can extend operations to participating countries.

“The SAATM has the potential for remarkable transformation that will build prosperity while connecting the African continent,” Raphael Kuuchi, vice-president for Africa at the International Air Transport Association, said.

“Every open-air service arrangement has boosted traffic, lifted economies and created jobs. And we expect no less in Africa on the back of the SAATM agreement.

“We commend the 23 states that have signed up to SAATM.  It is an important step forward. But the benefits of a connected continent will only be realised through effective implementation of SAATM—firstly by the countries already committed and also by the remaining 32 AU member nations still to come on board.”

According to an IATA survey, if just 12 key African countries opened their markets and increased connectivity an extra 155,000 jobs and US$1.3 billion in annual GDP would be created in those countries.

IATA also predicted that Nigeria’s passenger movement will increase from a monthly average of 774,000 to 1,171,400 with the new treaty.

The Airline Operators of Nigeria (AON) had asked the federal government not to go ahead with the implementation of the treaty.