The East African Business Council (EABC) is urging the East African Partner States to fast-track the finalization and implementation of EAC regulations on liberalization of air transport services.
This in a move set to lower flight costs and in turn reduce the cost of doing business in the region.
According to findings from the latest policy paper by EABC, Costs and Benefits of ‘Open Skies’ in the East African Community,air-transport liberalization is set to lower flight costs by 9 per cent and see a 41 per cent increase in flight frequencies.
“Liberalization of air services in the region is set to increase traffic volumes, improve connectivity and lower air transport fares. This will in turn increase trade and tourism, inward investment and productivity growth,” said EABC CEO, John Bosco Kalisa.
Kalisa is urging the EAC Partner States to waive landing fees, excise duty on aviation fuel, navigation, landing, parking and Covid-19 related fees to see a reduction in operating costs.
“To encourage imports by air, EAC Partner States should waive all import duties and Value Added Tax (VAT) by air during the Covid crisis.”
The policy paper also recommends for the EAC Partner States to provide subsidies for the aviation industry in the form of direct financial support; loan guarantees, corporate bonds and tax reliefs.
EABC is also urging EAC Partner States to grant each other the free exercise of the rights of the first, second, third, fourth and fifth freedoms of the air on scheduled passenger, and non-scheduled passenger, cargo and/or mail flights performed by an Eligible Airline to/from their respective territories.
“By removing foreign restrictions, EAC Partner States will be able to attract private sector investment. This will open up access to capital and avail investment in infrastructure upgrades and capacity expansion for regional airports,” Kalisa added.
Covid-19 has seen a drop in the tourism sector.
In 2020, EAC received about 2.16 million international tourists compared to about 7.05 million in 2019.
International tourist receipts dropped from $6.1 billion in 2019 to about $1.9 billion in 2020.