Economic Effects of Progressive Air Transport Liberalization in Africa.
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Date
2007-07
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A.A.U
Abstract
Empirical analysis on economic effects of liberalization in the context of African air
Transport sector is not much discussed in the literature and the continent's policy makers and
The industry operators need such analysis to implement liberalization initiatives. As such, The
Purpose of this study is to empirically measure economic effects of progressive air transport
liberalization in Africa by taking the case20city-pair routes to/from Addis Ababa for the
Period 2000-2005. by employing a Two-stage least square estimation procedure for a Panel
data set, passenger demand. fare and departure frequency models are estimated to see the
impact of bilateral air service agreement (BASA) liberalization. Liberal policies are
assumed to affect the two supply side variables i.e. fare and departure frequency.
accordingly, The frequency model indicates that a significant increase in departure frequency
is observed in routes that experienced both ' full' and 'restricted ' type of liberalization
compared to those governed by restrictive bilateral arrangements. in Addition. Higher increase
in the number of departure frequency in routes which experienced restricted liberalization
relative to those operated under fully liberalized arrangement is observed. regarding the fare
model, a statistically significant negative impact of liberali zation policy on standard economy
fare is not found . Finally, It is recommended that liberali zing BASAs, Especially Provisions
Pertaining to departure frequency will enhance service quality.
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Keywords
Air Transport, Africa, Bilateral air Service, Liberalization, Yamoussoukro decision