There seems to have been no other time in Ethiopia’s policymaking history that coverage has been as comprehensive as it is with the incumbent government. Under the Revolutionary Democrats, the policy circle has been bestowed with numerous policy documents covering all areas.
The latest addition to the expanding list of policy documents is the Aviation Policy, which has recently seen its first draft completed. This will take the policy outreach of the EPRDFites not only one step forwards, but also a leap up to the skies.
Of course, the process has landed the ruling developmentalists with some critics. Partly, the criticism relates to the oft repeated excuse of ‘implementation capacity’, which the Revolutionary Democrats extend to failures in effectively executing their own policy declarations. But there are also critics emanating from the philosophy that policies are not ends in themselves, rather means to a given end.
To the many critics of the ruling EPRDFites, therefore, the numerous policy documents the incumbent churns out entails their strategic inclinations to policy hardware, rather than essential software. By producing policy documents, critics argue, the ruling Revolutionary Democrats intend to please their multinational donors and institutionalist critics. If one sees this line as somewhat justifiable, it is easy to see where the love affair of the Revolutionary Democrats and their donors originates from.
Nonetheless, stunting the motives to produce policy documents to mere political objectives is too reductionist. After all, the task of governing inherently demands producing clear policy documents. This essential governing character could not be more different in the case of the EPRDFites.
Unlike the case with a minimal state, large states cannot function well without guiding policy documents. This is essentially the case because large states involve complicated horizontal and vertical institutional interactions. Having guiding policy documents is instrumental in avoiding conflicts of interests, which are numerous in big states; bringing better cooperation and keeping the duplication of efforts away.
In this context, the addition of the latest Aviation Policy could only be taken as an extension of the dominant culture within the EPRDF-led government. What would make it typical is the fact that it comes to organise what is often considered as a heavily regulated sector.
Major institutional frameworks of the Ethiopian aviation sector, including the sector regulator and flag carrier, are brainchildren of the last monarchical regime. Their establishment was largely facilitated by Americans, who were close confidantes of the Haile Selassie regime.
Of course, the regime was swift in shifting the leadership of the institutions from the Americans to Ethiopians. The action was aimed at creating sustainable knowhow with regards to the management of the institutions locally.
Little has changed since then in the structure, operation and policy objectives of the national air transport industry. As much as the institutional basis of the sector remains solid, even after 60 years, so does the protectionism that defines the sector.
This, nevertheless, does not mean that the carrying capacity, revenue and profit of the sector remain stagnant. Indeed, it has increased rapidly, with the national flag carrier now one of the largest airlines in Africa. It remains the pride of the nation, often taken as the pinnacle of corporate success.
The numbers tell the same story. The number of international passengers carried by the national flag carrier, Ethiopian, as its latest name stands, has been increasing rapidly over the years, reaching 4.1 million in 2011/12. The average annual increment of international passengers carried by the airline is 900,000.
One can find a similar achievement in the domestic flight sphere. The total number of passengers carried by the airline in its domestic service was 546,747 in 2011/12. The annual average increment in the number of domestic passengers is in the order of 50,000.
Key air transport indicators also show that the airline is one of the high fliers in the national skies. The total passenger kilometres, for instance, were 16 billion for its international services and 250 million for its domestic services, in 2011/12. The revenues freight carried, in long ton, of the airline in its international service was 180,510, while the case with its domestic flight services is 298. Such a service gained the airline annual operating revenues of 33.8 billion Br and a net profit after tax of 734 million Br in 2011/12.
The regulator, the Ethiopian Civil Aviation Authority (ECAA), and the infrastructure provider, the Ethiopian Airports Enterprise (EAE), have also seen considerable modernisation over the past 60 years, and particularly over the past two decades. The ECAA has become one of the outstanding regulators in Africa, in both the absorption and utilisation of modern air control technologies. Similarly, the EAE has gone far to make the nation more accessible.
Nonetheless, even after six decades of institutional development, Ethiopian skies are dominated by the national flag carrier. It remains the lone provider of scheduled flights in Ethiopia. This is underpinned by the regulatory protection the airline receives from the government that owns it.
Even if there are around 16 private air transport companies, they are restricted to providing chartered flights. The seat number limit imposed on them by law has deprived them of the essential commercial viability to give scheduled flights.
As much as the growth of Ethiopian is a result of pragmatic leadership and corporate resilience, therefore, no little part is contributed by the protection bestowed upon it by the state. It faces no competition, from either local or foreign airlines. Of course, this is not to mention the fuel subsidy it enjoys.
But insufficient competition has limited the growth of the national air transport industry. Be it skills development, services provision, technology absorption or marketing, insufficient competition has made the sector constricted. Everything is made, albeit improperly, depending on the growth of Ethiopian.
At the receiving end, customers, who would like to fly across the nation, do not have alternatives, both in terms of price and service provision. As a result, they are deprived of whatever benefit competition might have brought them.
Global experiences, however, shows that the sustainable profitability of national airliners and the growth of private airliners are defined by the level of competition the skies witness. Countries – from the US to China, Korea to the UK – have managed to realise a strong and vibrant air transport sector by making competition the rule of the game.
It is the vibrancy that airlines maintained through the ups and downs of competition that allowed them to weather the financial crisis of 2008. Unlike the car industry, which received heavy state protection, the air transport industry managed to withstand the challenges posed by the crisis thanks largely to the strength built through the long overdue competitive culture.
It is this same competition that brought creative airlines, like Virgin Airlines, to the air transport scene. This element is, however, missing from the Ethiopian skies due to the protectionism of the imperial regime, which has been maintained for decades.
With the oncoming aviation policy, the Revolutionary Democrats ought to try doing what the world has managed to do for years, and utilised to achieve desirable results. Opening the skies up to competition is essential for the growth of the nation’s air transport sector.
This not only benefits Ethiopian, but also helps the development of private airlines, whose existence is hindered by regulatory limitations. Sectors related to air transport will also develop. Consumers will also enjoy the benefits that competition brings, both in quality and cost.
Hence, it is essential for the upcoming aviation policy to look beyond the status quo and envision the creation of a vibrant air transport industry. The best option for this is to open up the skies to competition.
Leave a Reply