Why open air policy could be KQ’s undoing

Kenya Airways plane. FILE PHOTO | NMG

What you need to know:

  • The Open Skies Agreement is an international policy that calls for the liberalisation of rules and regulations that govern the global aviation industry — especially commercial — in order to create a free market environment that allows healthy competition.
  • The gist of the policy is to minimise government intervention in the aviation industry, which has been characterised by a protectionist stance in which states use their respective machinery to invest in, and operate commercial airlines. 
  • So, when Kenya signed and acceded to the commissioning of the ‘Open Skies’ agreement, it means that the government has to eliminate its involvement, if any, in the commercial decisions of Kenya Airways.

At the Ordinary Session of the Assembly of Heads of States and government of the African Union held in Addis Ababa, a key international legal instrument pertaining to the aviation industry on the continent was commissioned by the assembled.

The Open Skies Agreement is an international policy that calls for the liberalisation of rules and regulations that govern the global aviation industry — especially commercial — in order to create a free market environment that allows healthy competition.

The gist of the policy is to minimise government intervention in the aviation industry, which has been characterised by a protectionist stance in which states use their respective machinery to invest in, and operate commercial airlines. 

So, when Kenya signed and acceded to the commissioning of the ‘Open Skies’ agreement, it means that the government has to eliminate its involvement, if any, in the commercial decisions of Kenya Airways.

However, there is an aspect of Open Skies policy which, upon critical analysis, renders the deal a poisoned chalice for carriers such as Kenya Airways. The government divested from the national carrier more than two decades ago.

Under the open skies agreement, African airlines now have a freehand to operate from any country that is a state party to the agreement.

In this regard, a carrier such as Rwanda Air is now allowed to operate from Jomo Kenyatta International Airport in Nairobi on the same footing as Kenya Airways — meaning that Rwanda Air unlimited market access to Kenya’s aviation facilities, and market such that the Rwandan carrier has the right to operate its passenger and cargo flights to and from all intermediate points within Kenya.

This essentially means that Rwanda Air can operate local flights within Kenya such as between Nairobi and Mombasa, or Ethiopian Airlines can operate flights from Mombasa to Entebbe thus giving healthy completion to Kenya Airways and other local airlines.

The challenge with the Open Skies policy with regard to Africa is that many airlines, such as Rwanda Air and Ethiopian Airlines, are still fully owned and heavily subsidised by their respective governments.

Unlike Kenya Airways, which is a public limited company operating for profit, Ethiopian Airlines and Rwanda Air are mainly government agencies used by their respective governments to draw traffic into their territories for purposes of the countries’ strategic economic advancement.

In essence, Ethiopian Airlines and Rwanda Air are not purely commercial entities meant to bring profits for shareholders, but are government agencies. In view of the foregoing, carries such as Kenya Airways which are purely business ventures will be heavily disadvantaged in the Open Skies policy because they will be competing with carriers that do not have the obligation to earn profits. 

For this reason, there is need for Kenya as a state party to the Open Skies Agreement to rethink its commitment to this policy.

It suffices to point out that under public international law, the Open Skies agreement is essentially a treaty and is, therefore, governed by the 1969 Vienna Convention on the Law of Treaties.

It defines a treaty and relates to how treaties are made, amended, interpreted, how they operate and are terminated.

Kenya, citing the authority of convention, should seek to amend its commitment to the Open Skies Agreement in order to achieve an implementation mechanism that will save Kenya Airways from the inherent unfair completion.

The best option, therefore, is to reasonably delay the implementation of the Open Skies agreement in order to give room for proper consultations with affected stakeholders and allow the enactment of appropriate competition laws and regulations that will level the playing field within state parties to the agreement.   

The author is a media consultant  

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