FREQUENTLY ASKED QUESTIONS (FAQs) REGARDING ANNEX 5 OF THE YAMOUSSOUKRO DECISION, THE REGULATION ON COMPETITION IN AIR TRANSPORT SERVICES WITHIN AFRICA

Who is AFCAC?
The African Civil Aviation Commission (AFCAC) is the African Union’s specialized Agency for all civil aviation matters on the African continent and the Executing Agency (EA) of the Yamoussoukro Decision (YD) and the Single African Air Transport Market (SAATM).

When was AFCAC established?
AFCAC was conceived by the Constitutive Conference convened by the International Civil Aviation Organization (ICAO) and the Organization of African Unity (OAU) in Addis Ababa, Ethiopia, in 1969. It became an OAU/AU Specialized Agency in the field of Civil Aviation on 11 May 1978. In 2007, the Heads of State and Governments entrusted AFCAC with the powers of the Executing Agency of YD.

What does AFCAC do?
AFCAC facilitates civil aviation matters for African states to develop more integrated and sustainable air transport across Africa. Its mission is to promote cooperation and coordination among African States towards developing an integrated and sustainable air transport system and fostering the implementation of ICAO SARPs. AFCAC is also responsible for managing, overseeing, and enforcing the YD and liberalized African air transport market.

What is the Yamoussoukro Decision (YD) Decision?
The Yamoussoukro Decision (YD) is a landmark initiative adopted by the African Ministers of Aviation in 1999, intended to develop the aviation industry by promoting the full liberalization of intra-African air transport services including market access, the free exercise of the 1st, 2nd, 3rd, 4th and 5th Freedom Traffic Rights for scheduled and freight air services by eligible airlines. The YD has precedence over any multilateral or bilateral agreements on air services between State parties that are incompatible with the Decision. The YD was designed to bind all State parties to the provisions of the Decision.

Who is the Executing Agency of the YD/SAATM?
Article 9.4 of the YD provided that an African Air Transport Executing Agency would be established as soon as possible to ensure the successful implementation of the Yamoussoukro Decision. The principal responsibility would include among other things, the supervision and management of Africa’s liberalized air transport industry. AFCAC was entrusted with the powers of the EA in 2007 by the Assembly of Heads of States and Governments.

What is SAATM?
Adopted by the Assembly of Heads of State and Governments in January 2015, the Single African Air Transport Market (SAATM) was launched in January 2018 as an African Union Agenda 2063 flagship project
that aims to create a unified air transport market across the whole of Africa by fully implementing the Yamoussoukro Decision 1999.

What are YD Annexes?
The YD Annexes are regulations adopted by the AU Head of State and Government to support AFCAC in managing, overseeing, and enforcing the liberalized African air transport market. The annexes are:
•Annex 1: Form of Declaration of Commitment on the Decision relating to the implementation of the Yamoussoukro Declaration concerning the liberalization of access to air transport markets in Africa (a), (b) and (c);
•Annex 2: Duties and Responsibilities of the Monitoring Body of the Yamoussoukro Decision
•Annex 3: Dispute Settlement Mechanism
•Annex 4: Regulations On the Powers, Functions and Operations of the Executing Agency
•Annex 5: Regulations on Competition in Air Transport Services within Africa
•Annex 6: Regulations on the protection of Consumer of Air Transport Services

Who is the Monitoring Body of the YD?
Article 9 of the YD states that a Monitoring Body composed of representatives of the UNECA, AU, AFCAC, and AFRAA, which shall be assisted, as the case may be, by representatives of subregional organizations, is hereby established to assist the Sub-Committee on Air Transport composed of African Ministers Responsible for Civil Aviation in following up on the implementation of this Decision.

What are the duties and responsibilities of the Monitoring Body?
The duties and responsibilities of the Monitoring Body are set forth in Annex 2 of the YD, and the UNECA provides the Secretariat services required by the Monitoring Body. Among the powers and functions we can highlight:
•Bring to the attention of the Ministers Responsible for air transport, any provisions of the Decision that hinders the development of air transport in Africa and/or impose difficulties in the application of the decision, with recommendation for mitigation, and analyze and plan for the periodic review of the Decision;
•Ensure appropriate regulations are in place for the smooth functioning of the Single African Air Transport Market, and ensure the fair and equal application of the Yamoussoukro regulatory text on competition and consumer protection;

•Ensure a seamless implementation of the Yamoussoukro Decision between and within sub-regions and the realization of the Single Market cross the continent;

•Advocate and facilitate fund mobilization for sustainable operation of the single African air transport market and financial sustainability of the Executing Agency of YD;

•Ensure the application of a monitoring and evaluation mechanism on the implementation of YD Participate in the process of approving the work programme, business plan, budget, rules and regulations of the Executing Agency of YD;

•Ensure that the Executing Agency adopts and implements appropriate rules and regulations for the smooth management of the air transport market in Africa.

What is the reason for the adoption of the Annex 5 – Regulation on Competition in Air Transport Services within Africa?
Article 7 of the YD says that State Parties shall ensure fair opportunity on a non-discriminatory basis for the designated African airline, to effectively compete in providing air transport services within their respective territory. In addition, Article 9.5 says that the Executing Agency shall have sufficient powers to formulate and enforce appropriate rules and regulations that give fair and equal opportunities to all players, promote healthy competition, and ensure that consumer rights are protected. These two Articles are the foundation of the YD Annex 5 – Regulation on Competition.

What is the objective of the Regulation on Competition (YD Annex 5)?
The purpose of Annex 5 is to promote and guarantee free and fair competition in Intra-African air transport services to promote an environment where the air transport industry can develop sustainably and to contribute to the welfare of the citizens of the State Parties.

What is the Scope of the Regulation on Competition?
The Regulation on Competition applies to scheduled and non-scheduled intra-Africa air transport services, including any practice, agreement, or conduct thereto that might have an anti-competitive effect within the separate and joint territories of the regional economic communities (RECs) and the entire African continent. The Annex five prevails over any regulation adopted the Regional Economic Communities (RECs).

Does Annex 5 apply to external competition (outside African territory)?
The competition regulation only applies to anti-competitive practices that occur within the African continent, within the scope of the YD. It does not apply, for example, if an air operator operates a flight originating outside the African continent to a destination on the African continent, or vice versa. However, it may apply to a foreign operator if the violation in question concerns a route using fifth freedom traffic rights between two points on the African continent, even if the origin of the flight is outside the African continent.

What does the Annex 5 regulate?
The Annex 5 regulates various anti-competitive practices that may occur in the intra-African air transport market. These practices are carried out by air transport undertakings. They include Prohibited Practices, Agreements and Decisions/Cartels (Article 4). Also, Abuse of Dominant Positions/Monopolies (Article 5) is addressed. Furthermore, Non-discrimination in national and regional legislation and administrative measures (Article 6) is a key aspect. Lastly, Subsidies or State Aid (Article 7) are also covered.

Does the Annex 5 regulate Mergers and Acquisitions?
Although mergers and acquisitions can generate market distortions in the intra-African aviation market, Annex 5 does not have provisions to investigate these anti-competitive practices that may occur.

Who are the “Air transport undertakings” under Annex 5?
According to the YD, air transport undertakings include airlines and other air transport service providers, such as airports, air navigation service providers, airport ground passenger and cargo handling companies, travel agents, suppliers of computer reservations systems or global distribution systems, and all other categories of services provided to airlines directly at the airports.

What are anti-competitive practices?
Anti-competitive practices are corporate behaviors that challenge the normal functioning of a competitive market. They are divided into abusive and collusive practices.

What are collusive practices?
Collusive practices cover different behaviors pursued by companies with the clear intention of obtaining benefits for themselves at the expense of a free market, healthy competition, and satisfied consumers. The most common practices include agreements between companies (such as cartels) to reduce or eliminate competition.

What are abusive practices?
The abuse of a dominant position is an anti-competitive practice that takes place through unlawful use by a company (or by a group of companies, if it is a collective dominant position) of the significant economic power it holds in a specific market. This practice gives a particular company the ability to exploit consumers or other companies or exclude potential competitors

Which are the Prohibited Practices, Agreements, and Decisions/Cartels under Article 4? *
The Article states that any practice, agreement or decision which negates the objective of free and fair competition in air transport services shall be prohibited. To this end, State Parties shall undertake to ensure that any agreement between airlines, any decision taken by an association of airlines and any concerted practice which negatively affects the liberalization of intra-Africa air transport services and which has as its object or effect the prevention, restriction or distortion of competition, is prohibited.
Such practices include, but are not limited to, any agreement between airlines, any decision by associations of airlines and any concerted practice which:

(a)directly or indirectly fixes purchase or selling or any other trading conditions including charging prices on routes at levels, which are in the aggregate, insufficient to cover the direct operating costs of providing the services to which they relate;

(b)limits or controls markets, technical development, or investment;

(c)involves the addition of excessive capacity or frequency of services;
(d)divides markets or sources of supply by allocating passengers, territories, or specific types of services; or
(e)applies dissimilar conditions to similar transactions with other airlines, thereby placing them at a competitive disadvantage;

(f)Makes the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contract; and; has a detrimental effect on consumers.

What is the Abuse of Dominant Positions/Monopolies under Article 5? *
Any abuse by one or more airlines of a dominant position within the African Air Transport market shall be prohibited insofar as it may affect air transport services at the regional or at the African continent level. Such abuse may include:
(a)directly introducing unfair trading conditions to the prejudice of competitors;
(b)limiting capacity or markets to the prejudice of consumers;
(c)applying dissimilar conditions to similar transactions with other trading parties, thereby, placing them and/or resulting in other airlines being placed at a competitive disadvantage including discriminating between different consumers and competitors in equivalent transactions of services of like quality in terms of: the price charged; any discount, allowance, or rebate given or allowed in relation to the supply of services; the provision of services; or payment for services;
(d)Making the conclusion of contracts subject to acceptance by the other parties, of supplementary obligations, which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

What is the Non-discrimination in national and regional legislation and administrative measures under Article 6? 
Legislation or administrative measures in the territory of a State Party or of a regional economic community shall not discriminate against the provision of services by airlines or associations of airlines of other State Parties. A State Party or a regional economic community may, before enacting legislation or adopting administrative measures invite the Executing Agency to review the legislation in question.

What are Subsidies or State Aid under Article 7?
Under the Annex 5, the granting of any subsidy by any State Party or Regional Economic Community which distorts or threatens to distort competition is prohibit.

State Aid is completely prohibited?1*
No. The regulation says that the Executing Agency shall propose rules on the conditions under which a State Party or a Regional Economic Community may grant subsidies. So, under the regulation AFCAC shall develop the rules to guide States on how to grant subsidies.

What are the EA’s main attributions in applying the competition regulation?
The EA’s main attributions are ensuring the management, supervision, enforcement, and promotion of competition regulation, with due respect to the principles of market economy and free competition, for the efficient operation of markets, the optimal allocation of resources, and the protection of consumer interest.

How is EA implementing the Annex 5?
The EA is actively implementing the competition regulation by advocating with member States and Regional Economic Communities (RECs) for the domestication and harmonization of the annex within their national and regional regulations. Additionally, the EA is promoting the regulation during missions to member States and through capacity-building workshops for stakeholders. AFCAC is also signing Memorandums of Cooperation with Regional Competition Authorities to enhance the regulation’s promotion and to strengthen cooperation, coordination, and collaboration in the field of competition, in line with Article 15 of Annex 5.
1 *For more details consult the Annex 5 of the YD, the Regulation on Competition.

What are the responsibilities of EA in applying the Annex 5?
EA is responsible for supervising and implementing competition regulations, but it may delegate its functions or powers of investigation to regional competition authorities or a state party. The EA’s responsibilities include: implementing measures to increase transparency in the air transport sector; implementing measures to develop public awareness of the provisions of the Regulation; investigating and evaluating alleged violations of anti-competitive behaviors; granting, refusing, or revoking exemptions in the application of the Regulation; reviewing legislation or administrative measures of State Parties; and, reporting to the organ of the African Union responsible for the air transport sector on any matter relating to the application of these Regulation.

How is EA’s activity monitored?
The YD’s Monitoring Body is responsible for monitoring EA’s activities in implementing Annex 5.

Who can lodge a complaint concerning the violation of the Annex 5?
Should there be an alleged breach of these Regulations by an air transport undertaking, any State Party, air transport undertaking, or interested party is empowered to lodge a complaint in writing with the Regional Competition Authority or Executing Agency, even if the alleged breach has not been observed in the context of their professional activity.

How is the complaint managed?
The relevant Regional Competition Authority or Executing Agency is committed to promptly addressing complaints. Within thirty (30) days of receipt of a complaint, they will forward a copy of the complaint to the competent Authority of the State Parties. The competent authorities, in turn, have the right of audience before the Executing Agency. In cases where a Regional Competition Authority or the competent Authority of a State Party initiates an investigation into an air transport undertaking or association of air transport undertakings, either of its own motion or on the delegated Authority of the Executing Agency, the Authority is responsible for submitting its investigation report to the Executing Agency within a reasonable period.

When can the EA investigate an anti-competitive behavior?
The Executing Agency, with its regulatory authority, is empowered to undertake all necessary investigations into air transport undertakings and associations of air transport undertakings. The EA, acting on its own initiative, can initiate an investigation into a suspected breach of the regulations on competition by an air transport undertaking. However, when the EA receives a complaint, it is obligated to start an investigation process.

Which decisions can EA make on a Complaint?
Suppose EA finds that there has been an infringement of the regulations or any anti-competitive behavior by an air transport undertaking. In that case, it shall direct the air transport undertaking or association of air transport undertakings involved to bring such an infringement to an end, failing which it may impose such provisional measures or penalties as appropriate.

How does the EA set the penalties imposed on undertakings?
The Executing Agency, as the regulatory authority, may, depending on the gravity and the duration of the infringement, decide to impose penalties on an air transport undertaking or association of air transport undertakings where they intentionally or negligently violate the provisions of the Annex 5. The rules under which EA should determine the amount of the fines will be published by the EA, instilling confidence in the audience about the regulatory process.

How does Annex 5 impact airlines and other stakeholders?
Annex 5 promotes a more open and competitive air transport market in Africa, which can benefit airlines by facilitating market access and fostering healthy competition. It also provides consumers with a wider choice of air services and potentially lower fares.

What support is available for stakeholders’ seeking guidance on Annex 5 compliance?
AFCAC provides guidance and assistance to stakeholders through workshops, seminars, and online resources to help them understand and comply with the provisions of Annex 5. Information can also be found on the AFCAC Website.

How does Annex 5 contribute to the development of the African aviation industry?
By promoting fair competition and removing regulatory barriers, Annex 5 aims to stimulate investment, innovation, and growth in the African aviation industry, ultimately contributing to economic development and regional integration.

Where can I find more information about Annex 5 and its implementation?
Additional information about Annex 5, including relevant documents, guidelines, and updates on implementation efforts, can be obtained from AFCAC and other relevant aviation authorities and organizations.

How can I contact EA/AFCAC?
You can contact EA/AFCAC through the following means:
E-mail: secretariat@afcac.org 
Telephone: (+221) 33 859 88 00 (Monday to Friday from 8:00 am to 4:00 pm).

Is your privacy respected by EA/AFCAC Secretariat?
Yes. The EA/AFCAC places a high importance on user privacy and takes measures to ensure it is respected. We are committed to protecting personal information and maintaining confidentiality in all our operations.

These FAQs provide a brief overview of Annex 5 of the Yamoussoukro Decision and address common questions that stakeholders may have regarding its implementation and impact on the African aviation market.