Editor’s Note: Skift launched a new series, Gateway, as we broaden our news coverage geographically with first-hand, original stories from correspondents embedded in cities around the world.

We are featuring regular reports several times per week from Beijing, Singapore, Caracas and Cape Town, and look for us to add other cities soon. Gateway Singapore, for example, signifies that the reporter is writing from that city although her coverage of the business of travel will meander to other locales in the region. Read about the series here, and check out all the stories in the series here.

First there was the Yamoussoukro Declaration of 1988, which opened the door to liberalising African skies. A decade later it became the Yamoussoukro Decision. In 2012, the Abuja Declaration gathered similar amounts of dust.

The road to “open skies” in Africa has been paved with decades of bureaucratic paperwork. The continent is home to 12 percent of the world’s population, yet it accounts for just three percent of its airline traffic. Why the disconnect?

Protectionism

“The answer’s simple,” says Linden Birns of South African aviation consultancy Plane Talking. “Despite all the talk about creating a single African aviation market, we are still a continent where bilateral air service agreements regulate air travel between countries.”

These bilateral agreements — negotiated by governments, not airlines — stipulate everything from capacity to frequency to which city pairs can be served. Helping airlines respond to fast-changing markets is not high on the list.

While the spirit of open skies in Africa is strong, the political flesh is weak thanks largely to the number of state-owned flag carriers.

“We have too much protectionism,” says Birns. “It hampers trade, it hampers travel, and it is not helping economic growth in any way.”

“Over the next three years we’ll see significant changes in the African aviation landscape, particularly for low-cost carriers,” argues Hein Kaiser, spokesperson for South African budget airline Mango. “The removal of onerous bilaterals would open up the skies to more low cost airlines.”

Kaiser’s optimism is not without merit. In the four years since Mango pioneered a direct route between Johannesburg and the Indian Ocean island of Zanzibar it has become a top-performing leisure route for the airline.

Currency Complications

Bilaterals aren’t the only stumbling block, though. The price of aviation fuel varies widely between airports, air traffic control is highly fragmented, and currency volatility is a constant threat to the bottom line.

“You have to sell your tickets in local currencies, while 80 percent of your costs are in U.S. dollars,” notes Willem Hondius, CEO of Kenyan low-cost carrier Jambojet.

While consolidating its domestic routes within Kenya, the Nairobi-based airline has plans to cautiously expand its network elsewhere in Africa, with routes to Entebbe (Uganda), Goma, and Kisangani (both in Democratic Republic of Congo).

Small Middle Class

While costs and regulatory hurdles are to be expected, airlines with an eye on Africa also have to take local consumer behaviour into account.

“In Africa a lot of passengers simply pitch up on the day with a wad of cash and buy a ticket for the next flight,” says Erik Venter, CEO of Comair, which operates South African low-cost carrier Kulula. “It makes the whole model of revenue management very interesting, and pricing becomes almost impossible to manage because you don’t know what your forward loads are.”

Given the above, it’s little wonder that African airlines are facing a tight 2017.

While the International Air Transport Association (IATA) expects the global airline industry to make a net profit of $29.8-billion this year, carriers in Africa are expected to lose in the region of $800 million. Capacity is expected to grow by 4.7 percent, a shade above an expected 4.5 percent growth in demand.

And that is the crux of the issue, says Venter: “The fundamental issue in Africa is volumes, and the fact there’s such a miniscule middle class. Open skies would make it easier once the markets grow, but at the moment it’s irrelevant if you have open skies in Africa.”

“The markets don’t grow as fast in Europe as elsewhere, because the middle class is still small,” agrees Hondius from Jambojet. “It’s growing, but the group of people who can afford to travel is still limited.”

That lack of volume has knock-on effects for airport infrastructure, adds Venter: “Airports have to survive on six or eight arrivals per day. Our ground costs in Africa are 10 times what they are in South Africa, because there are simply no economies of scale.”

While the picture is currently gloomy, the clouds may have a silver lining. Commodity prices, which drive many African economies, are showing some growth, and open skies is gaining traction regionally, particularly in southern and West Africa. The African Union has also committed to liberalizing African skies by the end of 2017. But for now, perhaps don’t hold your breath.

Photo Credit: Jomo Kenyatta International Airport in Nairobi, Kenya, as shown August 10, is an important hub for Africa. Li Yong / Wikimedia.org