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- Oct 16, 2014
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Signs of the time (Left to Right): Ghana Vice President Kwesi Amissah-Arthur, Ethiopian Prime Minister Desalegn (2nd left), President Kagame (C) Mrs Jeannette Kagame, and Azeb Mesfin Haile, former Ethiopian First Lady.
LAST week, Rwanda and Ethiopia inked an aviation deal that on the surface looks routine, but which could be emblematic of a quiet yet significant shift in the nature of the region’s geopolitics, positioning the two states as growing players in a continent currently bereft of a clear strong leader.
The agreement, whose biggest takeaway was the fifth freedom rights, grants their respective flag carriers rights to essentially operate unhindered in each other’s airspace. The airlines can use each other as a hub to carry passengers to a third country on the continent, with the possibility that this will be extended to other regions.
“The exercise of fifth freedom traffic rights beyond Africa shall be subject to approval of the aeronautical authorities upon request submitted through diplomatic channel,” the agreement between the two countries’ air regulators stipulates.
It is the 38th bilateral air agreement Rwanda has signed so far, but one of its most significant: both countries are seen as the continent’s leading “developmental states”, with government having an outsized role in crafting economic direction, and and limited multiparty politics.
Touchy issue
Fifth freedom rights are a notoriously touchy issue in Africa. With roots in a 70-year-old international treaty that had the intention of opening up the skies, they have variously run either into officials grumpy about airlines from other countries making money from their citizenry, or national flag carriers seeking to protect their turf.
Last year, South African regulators barred Ethiopian Airlines from ferrying passengers on the Gaborone-Cape Town sector of the route, meaning a flight originating from its Addis Ababa-hub could only disembark passengers in Botswana but not pick up new ones.
The air tie-up between Ethiopia and Rwanda is intriguing. In late January, a RwandAir delegation quietly visited the Ethiopian capital, where they informed Ethiopian Airlines chiefs that they had settled on their airline as their strategic partner.
RwandAir has been seeking a minority shareholder to anchor its growth, in what has been a rapid expansion. Ethiopian was always a frontrunner for the deal: it is both a technical and management partner to the Kigali-based airline, while its former long-serving chief executive Girma Wake heads the Rwandan carrier’s board, in addition to advising the government in Kigali.
RwandAir has announced it is launching six more destinations in Africa, ranging from Abidjan, Bamako and Cotonou in West Africa to Harare and Lilongwe in the south, and Khartoum, as it races to take advantage of an open skies deal signed with Uganda, South Sudan and Kenya.
It currently flies to 18 destinations, nearly all in Africa, in what is shaping up to be a PTA Bank-financed expansion blitz at a time other African carriers are licking their collective wounds. It is this year set to take delivery of four new aircraft, bringing its fleet total to 14.
Ethiopian Colossus
Last year, the seven-year old airline ferried 600,000 passengers, or about a tenth of Ethiopian’s numbers. The resulting codeshare deal is thus meant to help boost this numbers towards an ambitious three million by the close of the decade, as a carrier that would likely have stumbled without the close attentions of president Paul Kagame looks to wean itself off state support.
For Ethiopian, which in its last set of accounts booked more profits than all other African carriers put together, the partnership is yet more momentum in its seeming unstoppable march to dominate the continent.
Ethiopian Airlines is reaching out ambitiously. (Photo/ET/FB).
African countries have been falling over themselves to court the airline as a strategic partner. It already partners with Malawi Airlines and Togo’s ASKY, and will now add Kigali to its multi-hub strategy in its current growth blueprint that runs until 2025.
It is also helped by the consistent foundering of its key rivals in sub-Saharan Africa. South African Airways, which is surviving on a government financial drip, is set to be restructured, a process that includes a search for a strategic partner.
Kenya Airways that last year banked the largest corporate loss in Kenya’s history is also being reengineered, with its partnership deal with the western carriers of KLM and Air France having come under sharp scrutiny.
Perhaps they might both look inwards: trade in services is seen as a strong tailwind towards still-elusive regional integration, and which would help insulate the continent from the volatility in external markets that has buffeted the regional economy.
Middle East competition
Ethiopian reportedly beat Etihad, the United Arab Emirates’ flag carrier, to RwandaAir’s affections. Part of the woes facing African carriers stem from the strength of the Mid-East carries, which counts ever-present titans such as Emirates.
Turkey’s president Tayyip Erdogan with Senegal president Macky Sall last year. Erdogan is visiting four West African countries this week.
With foreign carriers accounting for an estimated 80% of passenger traffic in Africa, breaking the stranglehold will include new and continental alliances.
“If you talk about real south-south cooperation among airlines Ethiopian [Airlines] is a true and living example of what a big airline can to to a young airline,” RwandAir chief executive officer John Mirenge told Ethiopian media.
The economic slowdown of China has triggered economic difficulties in its major trade partners in Africa, with the reduced prospects for growth cited in decisions such as the looming exit of Barclays Bank from Africa.
Such new partnerships could move in to fill the growing void left by Beijing and other ailing emerging markets such as Brazil.
This week Turkey president Recep Tayyip Erdogan is visiting four West African countries as the Eurasian nation seeks to buff up its clout on the continent following a bruising battle with Russia.
Last year he was in Ethiopia, Djibouti and Somalia as he seeks more influence in a continent which has seen its recent confidence in bullish growth shaken by external turbulence.
His flag carrier, Turkish Airlines, has in recent years carved a niche on African routes, including in 2012 becoming the first major international commercial airline in over two decades to fly out of Somalia.
Other carriers such as Ethiopian Airlines have since joined in with flights to Somali federal territory, helping to keep one of the world’s toughest aviation markets connected, and strengthening the case for inward looking answers to the continent’s future growth.
In addition to the growing prominence of the developmental states, it is also coming from unlikely places. Last year, Djibouti’s national carrier Daalo Airlines, which was recently in the news following a mid-air bombing aboard one of its aircraft, and Kenya-registered Jubba Airways launched the African Airways Alliance—out of Somalia.
Combined, they in 2014 carried 250,000 passengers—Turkish Airlines in the same year carried 200 times more passengers—and while it is still poses little challenge to existing giant aviation cartels, it is a small step in the right direction.
Source: The New Times
