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AVIATION AFRICA: Ethiopian Air Transport market set to grow by 2037

Posted 5 March 2020 · Add Comment

The International Air Transport Association’s (IATA) latest study on the importance of air transport and tourism to Ethiopia revealed that the sustained prioritization of air transport, connectivity and tourism as a strategic asset, would support an additional 900,000 jobs and at least USD 9.3 billion of GDP by 2037.

 

IATA’s economic report, which was presented in Addis Ababa yesterday, identified air transport and tourism as significant economic enablers. Air transport and foreign tourists arriving by air currently support 5.7% of the nation’s GDP valued at USD4.2 billion and about 1.1 million jobs. 

If current trends persist, Ethiopia’s air transport market will expand by 226% over the next 20 years, with annual passenger journeys increasing from 7.2 million in 2017 to 23.5 million a year by 2037.  

IATA identified four areas where Ethiopian government action can further promote aviation’s growth and bring even more value to the country:

·      Implement the Single African Air Transport Market (SAATM): SAATM will open Africa’s skies. Ethiopia's commitment to SAATM is positive for African aviation. The government’s ongoing efforts to increase SAATM adoption among other Africa States will provide a significant boost for aviation in Ethiopia and throughout the continent.

·      Ensure future infrastructure investments maximize the economic and social benefits of connectivity:  Much needed infrastructure capacity for Ethiopia was provided by the opening of the second terminal at Addis Ababa Bole International airport. For the country to retain its competitive position, future infrastructure investments should align with industry growth, be demand driven, fit for purpose and deliver required service levels at acceptable costs for users. 

·      Blocked funds: Airline funds blocked from repatriation in Ethiopia stand at USD70 million. The government should continue working with the industry on ways to make these withheld funds available. Airlines need to have confidence that they will be able to repatriate their revenues to allow the full benefits of aviation to be realized.

·      Improve air cargo facilitation: Ethiopia’s facilitation of air cargo through its customs and borders regulations ranks 86th out of 124 countries in terms of the worldwide Air Trade Facilitation Index (ATFI) and 42nd out of 135 countries in terms of the eFreight Friendliness Index (EFFI) globally. By implementing policies facilitating the frictionless movement of air cargo the country will be able to strengthen its position as a leading cargo hub for East Africa.

"The Ethiopian Government’s recognition of air transport as a key driver of the country’s economic growth has paid significant dividends.  Economic, political and regulatory reforms, aimed at energizing and transforming the economy from a state-led to market-based growth, with stimulants such as the recently-introduced “Visa on Arrival” process, are bolstering Ethiopia’s importance as a  as a major East African air transport hub,” said Raphael Kuuchi, IATA’s Special Envoy to Africa on Aeropolitical Affairs.

“Ethiopia’s continued prioritisation of air transport along with the four government interventions IATA is proposing, will help the country’s air transport and tourism market achieve the 226% forecast growth and in doing so, unlock even greater socio-economic opportunities for the country,” said Kuuchi. 

 

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