Air Transport Studies

TECM 221
OH Mokwena
PREVIOUS SESSION RECAP

© 2014 Ofentse Hlulani Mokwena 2

Airline Passenger Marketing: Where it
Fits

© 2014 Ofentse Hlulani Mokwena 3

© 2014 Ofentse Hlulani Mokwena 4
 The Purpose of this Unit
The module aims to familiarise you and develop critical understanding and basic
competencies in:

1. Trends in Air Transport such as regulation, deregulation, liberalisation and

Open skies in Africa.
2. Concepts and issues related to commercialization, privatization, and
globalization of Air Transport around the World.
3. Major national, regional and international controlling bodies in the Air
Transport sector.
4. Economic, demand and supply characteristics of the Aviation industry.
5. Passenger marketing, tariffs and the setting thereof.
6. Airfreight activities, practices and current (1990-2014) trends.
7. Fleet planning and aircraft selection criteria.
8. Air Transport and its impact on climate change and the governance thereof.

© 2014 Ofentse Hlulani Mokwena 5

 STUDY UNIT 2: CHAPTER 3
MAJOR AIRLINE ASSOCIATIONS
A. Air Transport
Organisations
B. Air Space Sovereignty
C. Freedoms of the Air
D. Yamoussoukro "Ds"

E. Open Skies &

Globalisation
© 2014 Ofentse Hlulani Mokwena 6
 Introduction
Chapter 5, explored the historical
and regulatory and deregulatory
dynamics of air transport. CHAP 5
History, Regulation &
Chapter 6 engaged the Deregulation (Liberalisation)
mesoeconomic side of air transport.
In that, our focus was on the CHAP 6
oligopolisitic nature of air transport,
Economics, Market
and the implications of national Strucuture & Government
carrier monopolies (high HHI Participation
indexes).
CHAP 9
Chapter 9 was an introduction to the Passenger Types, Demand &
airline passenger travel and HOW Marketing
the industry seems to identify,
attract, manage and retain that
demand.
Introduction: Purpose of this Unit
This section pulls the reader out of the localised context
in SU1 and introduces the international environment
wherein air transport managers must navigate their way
through.

Thus, it focuses chiefly on the international bodies and

regulations that govern their air transport sector:
• Ensuring suitable relationships between countries,
carriers, airlines, passengers (i.e. safety and security)
and cargo (i.e. security, handling etc).
Major International Associations
ICAO: INTERNATIONAL CIVIL
AVIATION ORGANISATION
 ICAO: Vision
Information here is based on the ICAO website Accessed Aug 2014. http://www.icao.int/about-icao/Pages/default.aspx

VISION
PRACTICES
Achieve the sustainable
• Develops policies and
growth of the global civil Standards,
aviation system. • Undertakes compliance
audits,
MISSION • Performs studies and
analyses,
To serve as the global forum of • Provides assistance and
states for international civil • Builds aviation capacity
aviation. through many other
activities and the
cooperation of its Member
MEMBERSHIP States and stakeholders.
191 Signatory States
How many African?
IATA: INTERNATIONAL AIR
TRANSPORT ASSOCIATION
 ICAO: Vision
Information here is based on the ICAO website Accessed Aug 2014. http://www.icao.int/about-icao/Pages/default.aspx

VISION
To be the force for value creation and
innovation driving a safe, secure and AFFECTED SECTORS
profitable air transport industry that • Airlines
sustainably connects and enriches
our world.
• Airports
• Travel Agents
• Freight Forwarders
MISSION
• Government Policy
IATA’s mission is to represent, Makers
lead, and serve the airline • Ground Handlers
industry. • Industry Suppliers &
Manufacturers
MEMBERSHIP • Passengers
240 Members from 118 nations
Globally
How many African?
Major Continental Associations
AFCAC: AFRICAN CIVIL AVIATION
COMMISSION
 AFCAC: Origins
This is an extract from the AFCAC website Accessed in Aug 2014.
http://www.afcac.org/en/index.php?option=com_content&view=article&id=97&Itemid=68

VISION
To foster a safe, secure, efficient, MISSION
cost effective, sustainable and • To facilitation cooperation
environmentally friendly civil and coordination among
aviation industry in Africa. African States towards the
development of integrated
and sustainable Air
Transport Systems; and
• Foster the implementation
of ICAO SARPs and the
development of
harmonised rules and
regulations consistent with
the best international
practices in civil aviation.
MEMBERSHIP
54 African states
AFRAA: AFRICAN AIRLINES
ASSOCIATION
 AFRAA: Origins
All the content here was extracted from the AFRAA website Accessed Aug 2014.
http://www.afraa.org/

VISION
To be the leader and catalyst for the growth of a globally competitive and
integrated African airline industry"

MISSION
"To serve African airlines, promote and protect their common
interests"
 AFRAA: Origins
All the content here was extracted from the AFRAA website Accessed Aug 2014.
http://www.afraa.org/
OBJECTIVES
• To facilitate the establishment of industry best practices in safety and
security
• To be the repository of data and its analysis focusing on key issues in the
aviation sector.
• To provide a platform for consensus building among member carriers.
• To facilitate joint projects between member airlines aimed at reducing
their costs and increasing their revenues.
• To actively contribute in human capital development.
• To interact with the regulatory bodies to support and protect the
common interests of all African airlines.
• To provide forums for members and industry partners to enhance their
knowledge base and enhance mutual cooperation.
• To facilitate the development of environmental policies in keeping with
industry best practices
• To reflect the positive image of the African airlines worldwide.
 ICAO (1944- UN)

IATA (1945- Trade Association)

AFCAC (1964-69- ICAO

till 2007)

AFRAA (1968-
Trade Association)

Civil Aviation Authorities in

African States
• These organisations form the regulatory and trade representative
bodies in air transport.
• In Africa, they are currently aligned to the African Union Agenda
2063 and the Implementation of the Yamoussoukro Decision.
 “Should Airspace above a nation be considered within the
sovereignty of each nation, or should airspace, like the high
seas, be considered international?”

AIR SPACE SOVEREIGNTY

 Air Space Sovereignty: Rationale
The Air is free and no nation has authority over the space--
unless if for self preservation.

The Air is not free and nations have authority over the airspace
above their soil-- surveillance, monitoring and security issues.

World War I guided the final decision which affects our

contemporary day.
 Air Space Sovereignty: Principles &
Provisions in the Paris Convention
Key Points Note:
Principles that Governed the Convention (pg 529).

Recognised Provisions for the Safe Conduct of International

Air Navigation (pg 529-530).

Principles Adopted to Guide the Convention (pg 530).

Collectively, this is the governing basis of air transport in

practice today.
 Air Space Sovereignty: Principles &
Provisions
Principles that Governed the Convention (pg 529).
You should be able to explain them, for example:
• "full and absolute sovereignty of each state of the air
above its territories and territorial waters” and the “right
to exclude foreign aircraft”
• Civility in maintaining and executing air space sovereignty
within the limits of national security and the enforcement
of “reasonable regulations” when granting access to foreign
air craft (air craft of the contracting state).
• Admission (access) and treatment of foreign air craft must
be without discrimination on the grounds of nationality.
• All air crafts must have a nationality; and must be in the
records of the foreign state (contracting state).
 Air Space Sovereignty: The Havana
Convention 1928
The Havana Convention on Commercial Aviation
applied exclusively to private aircraft.

It laid down basic principles and rules for aerial traffic,

recognising that every state has complete and exclusive
sovereignty over the air space above its territory.

Clauses largely enabled USA owned airlines to freely

operate services within North and South America.
This was extracted from:
http://www.icao.int/secretariat/PostalHistory/1928_the_havana_convention.htm
INTERNATIONAL AIR LAW: THE
CHICAGO CONFERENCE 1944
The Chicago Conference 1944 (pg 533)
Purpose:
• "To foster the development of international civil
aviation in a safe and orderly manner, and
• "To establish international air transport service
on the basis of equality of opportunity and
sound economic operation."
It superseded the Paris and Havana Conventions.
It also established ICAO.
 Discussion

Read paragraph 1 on page 534 and list what the

Chicago Conference of 1944 Established.
The Chicago Conference 1944 (pg 533)
Establishments
• Granted complete and exclusive sovereignty
over the air space above its territory.
• Positioned the rights to transit, land, and pass
over and in territory "secured to prior
authorisation"
• Established the applications of customs
regulations and national traffic rules to aircraft
in international flight
• Bound states to take effective measures to
prevent the spread of disease by air; etc.
 Discussion

Read paragraph 2 on page 534 and list what the

Chicago Conference of 1944 Specified.
The Chicago Conference 1944 (pg 534)
Specifications
• Facilitated air navigation for avoiding delays in
immigration, quarantine, customs and clearance.
• Each state is bounded to take adopt standard
procedures on airport control, radio services, the use
of signals, maps etc.
• It also specified that aircrafts traveling internationally
must carry certain documents.
• Carriage of munitions (guns) and other items (i.e.
utility knife) was prohibited.
• The need for uniformity in the 11 items listed on page
534. NB!! NB!!
 The Chicago Conference 1944:
Agreements (pg 536)
Agreements in the Chicago standard for have the following
provisions:
1. Which air rights can be exchanged intergovernmentaly by
the airlines of the countries.
2. That treatment is fair and nondiscriminatory with regard
to airport charges (i.e. by nationality).

3. How customs duties and inspection fees are

imposed/translated (i.e. currency, international law).

4. When the exclusion from such duties and charges is

applied.
 The Chicago Conference 1944:
Agreements (pg 536)
• Bilateral Agreements between two (bi) nations.

• They are negotiated at national level to obtain satisfactory

operating and traffic rights to be exercised by certified
airlines in a nation.

• They usually apply from the 1st to the 5th Freedoms of the Air
(may be applied to all).

• Trilateral Agreements involve three nations and are usually

relevant from the 5th to the 8th Freedoms of the Air.
 Bilateral Agreements

Freedoms of the Air

ICAO & IATA

The Chicago
Conference of 1944

Havana Convention
of 1928

Paris Convention of
1919

Air Space
Sovereignty
FREEDOMS OF THE AIR
YAMOUSSOUKRO: FROM
DECLARATION TO DECISION
Yamoussoukro Decision: Introduction
As a response to the decolonial process, still underway in
Africa, inter-African air transport is pivotal.

South African Minister of Transport, Ms Dipuo Peters

contended that “we need to work towards inter-connectivity”
she elaborated by highlighting that “our forebears will not
pardon us for continuously relying on the capitals of our
former colonisers to connect people of the continent”.

The African Union recently reflected on air transport and

argued that it must serve African interests at large (African
Union, 2005).
 Yamoussoukro Declaration
The Yamoussoukro declaration was primarily aimed at “airline cooperation
and integration”(Schlumberger, 2010). Over an eight year period, it intimated
the following:

• Phase One ( Year 1 and 2)

– Maximising capacity between carriers
– Achieved through exchanging technical and acpacity data
– Thus preparing gateway airports and promoting cooperation among national
carriers in order to eventually merge into larger competitive airlines.
• Phase Two (Year 3 to 6)
– Commits airlines to joint operations on international routes (i.e. code sharing);
– Also facilitates joint marketing, maintenance, training etc.
• Phase Three (6 to 9)
– Strive toward achieving complete integration of airlines by establishing joint
airline operations or entities.
Yamoussoukro Decision: Introduction
Much of African air travel is
limited to 10 hubs presented
in Figure 22.

The Yamoussoukro Decision

is Africa's response to:
1. Air Transport
Deregulation in the USA
(1978);
2. Its impacts all over the
globe. (Globalism)

Figure 22: Intra-African Air Transport

Services (InterVISTAS, 2014)
 Yamoussoukro Decision: Purpose
In essence, “the Yamoussoukro Decision regulates
commercial air transport activity in a single African
space” (African Union, 2005).

It aims to bring to effect the conditions that enable and

encourage viable “integration imperatives of the
Continent” with liberalisation at its core (African
Union, 2005).
Yamoussoukro Decision: Mandate
The Decision calls for (InterVISTAS, 2014):
• Full liberalisation of Intra-African air transport
services in terms of access, capacity, frequency and
tariffs;
• Free exercise of first second, third fourth and fifth
freedom rights of passenger and freight air services
by eligible airlines;
• Fair competition on a non-discriminatory basis; and
• Compliance with international safety standards.
Yamoussoukro Decision: Benefits
OPEN SKIES & GLOBALISATION
 Open Skies
• The Open Skies concept is an international policy that calls for
more liberalised aviation.
• "Under an open-sky agreement, carriers of both countries fly
any route they wish between the countries and can continue
those flights to third countries."-pg 548
• Cabotage (flying local) is not permitted in the third country.
The Economics of Open Skies are presented
here (Button, 2008)
Conventional air transport regulations are
limiting capacity to Q1 and price up to F1,
Average Cost C1 (i.e. negotiated pricing and
regulations).
Open-sky policies unleash market forces:
from F1 to F*1 in D1 and C1 conditions.
Stimulating more D2 and realising C2 and
F2.
 Globalisation
• Globalisation is the process of
making or transforming domestic
(i.e. local) things into global ones.

• It is a cultural, economic, social and

political phenomenon. Impact of Globalisation on Region (Button, 2008)

• The world is viewed as flatter:

international access is much faster
through advances in technology be
it in communication or transport.
• Air transport relates heavily to
globalisation.
Links between world trade manufactures and air
freight volumes (Button, 2008)
 Responses to Globalisation: Air
Transport Alliances Secure Profit
SUMMARY
Summary
 Case Study 2

Note the distribution of

international air travel in
the Southern part of
Africa compared to the
Northern Part of Africa.

Figure 3 Passengers Carried in SADC for African and non-African Origins

and Destinations (Muvingi, 2012)
Note that South Africa's
Pax volumes are relatively
low compared to other BRICS
Countries Pax volumes.
Case Study 2

Figure 4: Air Transport Passengers Carried in BRICS countries (Data from

World Bank, Format by Author)
 Case Study 2: Brief
The main aim of this short academic essay is to develop student's
ability to link theoretical and policy concepts with existing challenges.

Students are expected to have a sense familiarity with the role of air
transport in the regional context, but also how it relates to the BRICS
countries.
You are individually expected to respond to the questions in your
Study Guide in Study Unit 2.

PROPOSED APPROACH: min 1000-3000max Words

Step 1: Answer a and b.
Step 2: Answer c and d
Step 3: Use the answers in Step 1 and 2 and link them to the
Yamoussoukro Decision; BRICS and the African Union's Agenda 2063.
Thank You!

© 2014 Ofentse Hlulani Mokwena 55