The relationship between South African aviation policy in Africa and air passenger traffic flows

Abstract

International air transport has been one of the most highly regulated and restrictive industries in the world, governed by bilateral air services agreements (BASAs). More recently progressive liberalisation, through the gradual removal of regulatory restrictions, has taken place in major air markets of the world. In Africa, more than a decade ago, African leaders agreed to liberalise the intra-African aviation market through the Yamoussoukro Decision (YD) of 2000 but its full potential across the Continent has not yet been realised. Many studies worldwide have been done on air liberalisation and its impact on air traffic flows but very few include Africa. This study focuses on the impact on air passenger traffic flows of South Africa’s aviation policy in Africa by investigating the link between South Africa’s aviation policy, as reflected in the design of its BASAs, and air passenger traffic flows over an 11 year period (2000 to 2010). A mixed research methodology was followed. Qualitatively, a two-round Delphi technique was employed to determine the views of aviation experts from academia, the public and private sectors, on features of BASAs, as well as those unrelated to BASAs, that have an influence on air passenger traffic flows between country-pairs in Africa. Twenty-five BASA features and 48 non-BASA factors were identified from which a conceptual framework was formulated. The quantitative phase aimed at estimating and statistically quantifying the impact of the degree of restrictiveness or liberalisation of the respective BASAs, as measured by four variants of the Air Liberalisation Index (ALI): STD, 5th+, DES+ and OWN+. It also aimed at identifying which specific provisions of BASAs had the most significant impact on air passenger traffic flows. A fixed one-way panel regression technique was applied to the selected 11 year panel data set of 42 African countries, representing five markets: intra- African; the SADC; West African; East African and North African. A number of other predictors were also identified which meant that the impact of the aviation policy on air passenger traffic flows could not be tested in isolation: the degree of liberalisation of the policy as measured by the ALI; the number of years BASAs have been in place; GDP; the presence of a low-income country; the magnitude of services trade flows; and population size. The simultaneous impact of the six predictors was tested in each of the five markets with the various markets showing different predictors as being statistically significant. In the intra-African and SADC regional markets these were Trade, ALI and GDP; in the East African market Low Income, Trade, ALI and Population but in the North African market only GDP. Where the impact of the aviation policy was found to be significant, individual provisions such as fifth freedom traffic rights, capacity, designation and cooperative arrangements were tested for their impact on air passenger traffic over two time periods: 2000 – 2010 and 2006 – 2010. These also proved to be significantly different for the various regions. The results of this research provide new insights into the relationship between air passenger traffic flows and aviation policy in the South African – intra-African and regional contexts. The research technique used in the South African – intra-African market expands on the established cross-sectional 2005 QUASAR database, laying a foundation for similar studies in other regions where impact of policy over time can be established.