Friday, December 8

The Gambia is the second most expensive for international flights in West Africa

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By Yusef Taylor

A report by the African Competition Forum (ACF) focused on a Cross Country Study on Airlines in Africa has concluded that The Gambia’s ambition of making “Banjul International Airport a major hub is a dream that is farfetched in the short term”. The ACF held a biannual conference at the Sir Dawda Kairaba Jawara Conference Center earlier last week and showcased various studies which featured The Gambia.

The section on The Gambia was conducted by “the Gambia Competition and Consumer Protection Commission — in collaboration with key stakeholders in the aviation and tourism industry, namely Gambia International Airlines, Gambia Civil Aviation Authority, and Gambia Tourism Board”. Researchers’ findings indicate that the numerous “challenges confronting operations in the Gambia include the restrictions on traffic rights, the rising cost of fuel, Airport charges and taxes, lack of working capital and brain drain”.

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More expensive to purchase tickets from The Gambia

One of the analyses compares the cost of flight tickets per passenger and the cost of taxes per ticket when purchased in The Gambia against the Regional Average. The comparison shows that for regional flights, tickets purchased in The Gambia cost $17.82 USD more than the regional average. The difference is tripled when international flight tickets are compared. An international ticket will cost $50.72 USD more when purchased in The Gambia compared to the regional average. The situation is even worse when Government taxes are compared.

Turning our attention to Government taxes shows that The Gambia is overcharging compared to the regional average of taxes charged. According to researchers, passengers travelling from The Gambia pay $54.71 USD more in taxes than the regional average. Meanwhile, for international flights passengers travelling from The Gambia pay $98.25 USD more in taxes than the regional average.

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The report highlights that “high airport taxes and charges are inhibiting the growth and development of The Gambia air transport industry. Taxes particularly for intra-African flights are sometimes higher than the actual fare for the flight. The country has the sixth-highest charges for regional flights and the second-highest for international flights in the West African Region”.

One of the impacts of increased Airport charges and taxes is low passenger flow. Researchers highlight that “passenger flow in West Africa is “pretty low” and this could be attributed to high ticket prices. Many Gambians cannot afford to fly because of the high cost of tickets. For instance, a thirty-minute return flight to Senegal can cost as much as $300″.

No flag bearer driving GIA monopoly

One of the biggest challenges is that The Gambia International Airlines (GIA) is not operating as an airline operator but instead acting as a monopoly over ground handling and other services. The ACF Report laments that “there is no National carrier / Flagbearer in the Gambia. The Gambia International Airlines, the National carrier, has not been flying since their last joint operation with Mauritania Airlines in 2015”.

Due to this “the Banjul International Airport ground handling is largely monopolized by GIA and this monopolistic position being enjoyed by GIA was not conferred by any legislation or regulation. As such, GIA is a de-facto monopoly contrary to section 2 of the Competition Act 2007”.

This is now an open secret as “during the study, major concerns have been raised over the monopoly GIA has on ground handling services. Some of the players are [of]the opinion that ground handling services will be improved if competition is introduced in the area of ground handling”. Experts say “the current monopoly has been referred to as one of the main deterrence for attracting more airlines to come to BIA”.

The challenging position GIA finds itself in is due to not being able to start its flight operations. This has forced GIA to hold onto its only sources of revenue which includes “ground handling, cargo agency services, ticketing agency services [for the government]and pilgrimage (Hajj) operations services”. To address this, it’s recommended for the Government to “provide GIA with the necessary financial and human capital to be able to start its flight operations. Giving GIA a monopoly on ground handling is meant to keep them operational and profitable. However, their monopolization is affecting the industry and its potential has not been fully utilized by the Government”.

Sadly, researchers state that “unless GIA is fully supported to engage in flight operations and allowed to operate and compete in a free, fair, and competitive manner, the growth of the industry may likely be stagnated”.

Competition concerns

Some of the competition concerns raised by the report highlight that the government is operating at a loss due to GIA’s monopoly over Hajj and other ticketing arrangements. The report highlights that “in 2008, the government decided to stop all operators from carrying out Hajj-related activities and gave exclusive rights to the GIA, a government-owned airline, to provide the necessary services for the annual pilgrimage”.

The impact of this decision was assessed by researchers who concluded that “Hajj operations must be reformed” and “the re-introduction of competition in the sector is essential to enhance consumer welfare (improved quality of services at competitive prices), Currently, the Hajj operations are liberalized and up to seven (7) players are active participants”.

A Standard Newspaper report indicates that for the 2023 Hajj which has already concluded “about 13 Hajj operators including the national carrier GIA are expected to fly Gambians to the holy city, as opposed to 9 last year”. This means that the number of Hajj operators has almost doubled. The Standard Newspaper article highlights that the National Hajj Commission Chairperson, Sheikh Ebrima Masaneh Jarju stated that “new guidelines will now oblige Hajj travel agencies to fix their packages not more than the threshold to D460,000”. This highlights how expensive Hajj travels have become. In addition to this, “the Gambia has now regained its full quota of 2,000 slots, as opposed to the low figure during the Covid-19 pandemic”.

Another area where GIA is costing taxpayers money is in the Government’s decision to centralize Government travel back in 2010. Over a decade back “the Government decided to centralize the purchase of tickets for Government officials travel through GIA [in an attempt to]rationalize cost/expenditure on ticket sales”. However, this has ended up creating another monopoly which the ACF Report says “has the effect of excluding or restricting other travel agencies from competing for the purchase of travel air ticket for Government travel”. An assessment by the Gambia Competition and Consumer Protection Commission (GCCPC) in accordance with the Competition Act 2007 “revealed that GIA has proven to be more expensive compared to players offering the same service”.

Pro-Fiscal Transparency Civil Society Organisation, Gambia Participates published an infographic indicating that the top 10 spenders on travels from 2019 to 2021 have spent a combined D728.1 million with the President’s Office spending the most (D221.9 million). This is followed by the Ministry of Foreign Affairs with D123.9 million, while the Ministry of Finance and Economic Affairs was ranked third highest with D86.5 million spent over a three-year period. This would have cost taxpayers less money if GIA was not given a monopoly to source tickets for government travel.

Another anti-competitive practice is the “exclusivity contracts by Tour Operators (TUI), and some hotels, and providers of accommodation for tourists to stop Corendon (both active players in the Dutch market) from penetrating the Gambian market. The contract is viewed as an attempt to distort competition and create an entry barrier which is a contravention of Sections 30 and 31 of the Competition Act 2007”. In response to this the GCCPC “issued a direction to TUI and industry players in accordance with section 50(2) of the Competition Act 2007 to desist from entering into such anti-competitive agreements”.

Lack of internet access and hassling tourists

Another downside of the BIA is its lack of Internet access. Nowadays, “most millennial travellers are obsessed with the Internet and free WiFi is now available in all standard airports around the globe”. Unfortunately, this is not the case in The Gambia.

Some additional challenges affecting The Gambia’s ambition to become a major hub include poor ventilation, frequent bird strikes and hassling of tourists which researchers describe as “another menace as far as tourism is concerned. The airport is inundated with security forces and other security personnel, most of whom add no value to the operation of the airport”. Sadly, researchers say officials “extort gifts from tourists in the name of searching items” a habit which the report says “is a cause for concern and discourages many tourists from coming to The Gambia for holidays”.

On the issue of bird strikes and poor ventilation, researchers say this situation is “exacerbated by long turn-around time is also sickening to the tourists”, meanwhile, “frequent bird strikes — erodes the confidence of tourists and needless to say would affect traffic at the airport. For example, Thomas Cook airline/fleet in the 2016/2017 tourist season caused panic due to a bird strike. Similarly, both Titan and Enter Airlines in 2018 were also affected”.

The issue of ventilation is expected to be addressed by the construction upgrades to the BIA with the report recognising that “the airport Structural work is in progress”. Our research indicates that in 2009 the OPEC Fund for International Development, Saudi Fund for Development, and Kuwait Fund for Arab Economic Development approved a $34.9 USD million loan project to rehabilitate the Airport. More recently the Saudi Fund for Development approved a $31 USD million Rehabilitation project of the BIA. It will be important to assess if these projects can address The Gambia’s challenges identified by the ACF Report.