As Morocco moves forward to meet tourism development targets for 2010, the decisive liberalization of the kingdom’s air transport is beginning to bear fruit. Tourism arrivals registered a year-on-year rise of 14% in 2007, according to the Ministry of Tourism, bringing a total of 6.72 million visitors to the developing country. Building up its tourism industry is a top priority for this destination, which is a mere two hour flight from major European cities like Paris and Madrid.
Morocco and the European Union signed an Open Skies Agreement in 2006, paving the way for growth in the underdeveloped Moroccan air transport sector as well as heightened competition for its national carrier, Royal Air Maroc (RAM). Competition from low-cost European airlines is already bringing Morocco closer to achieving its goal of 10 million tourist arrivals by 2010, but some are worried about the effect of competition on local carriers.
Although the conclusion of the agreement gave rise to initial concerns about allowing European low-cost operators to compete with local carriers, most in the industry agree that the overall impact has been largely positive. The local air transport industry has capably adapted to the heightened competition, with the launch of two local low-cost carriers, AtlasBlue (a low-cost subsidiary of the national carrier RAM) and Jet4You. These companies are both striving to remain competitive in local markets, as well as to capitalize on the new access to European markets.
“The liberalization of air transport in Morocco is very positive for Morocco,” said Karim Baina, vice-president of Jet4You. “We have seen immediate results. There was a boom in air transport and in the number of clients, passengers, and tourists who come and discover Morocco. When the lock on air transport was removed, this led to the creation of new operators like Jet4You. It led, as well, to greater supply in Morocco. By raising the supply, this has allowed us to lower prices on tickets and thus to make Morocco a more attractive tourist destination, both in terms of fares, and in terms of visibility for European consumers.”
Decade of reforms
Since Mohamed VI ascended to the throne nearly a decade ago, the kingdom has pushed through a number of free-market reforms, including the liberalization of finance, banking and trade. It has also emphasized social reforms, for instance by reworking the Moudawana to improve women’s rights and organizing historical forums to address the former regime’s human rights abuses that had been never been publicly acknowledged. Such reforms testify to a modern, more open Morocco. This Morocco is eager to advance to international standards of political and economic practices, and to become more business-friendly in the eyes of foreign investors and trade partners. Its courage in confronting the economic risks of globalization head-on have been paying off, with soaring levels of foreign direct investment and a boost in tourism indicators.
Air transport liberalization dates back to 2004, when Transportation Minister Karim Ghellab laid out his plan to triple the availability of international air transport. King Mohammed VI expressed his support for the strategy in a royal letter, where he stated, “As we had highly recommended, the project to reform the map of the skies has just been put into effect. This will allow not just for the sector’s liberalization, but also for reducing transport costs, greater fluidity and the appropriate coordination between issuing markets and tourism zones.”
In 2006, after a successful lobbying campaign for a single comprehensive agreement with the entire European bloc, Morocco became the first non-EU country to conclude a complete aviation agreement with the EU. The Open Skies Agreement abolished restrictions and limits regarding passenger transport between the EU and Morocco, by both Moroccan and European carriers.
This agreement was a major achievement for the kingdom, as in the absence of one comprehensive agreement, Morocco would have been forced to spend years renegotiating bilateral accords, some of which date back to the 1950s, with each individual EU member. The Open Skies Agreement swept away air transport barriers between Morocco and the entire realm of its number one trade and tourism market, Europe.
One year after the conclusion of the Open Skies Agreement, more new aerial routes were opening in Morocco than in any other country in the world. They now link untapped tourist markets in Europe to seductive destinations like Marrakech and Agadir. Within the European market, the industry has seen a notable rise in traffic between the UK and Morocco: according to the Ministry of Transport, 359,000 passengers travelled between these two countries in 2005, up 62% from 223,000 in 2003. Three British carriers began operating regular and charter flights between the London/Manchester and Marrakech/Agadir regions since 2004. Already popular routes like Paris-Casablanca and Paris-Marrakech are reinforced by the entry of new carriers who create a higher volume of supply to accommodate increasing numbers of tourist arrivals. The multiplication of routes between Morocco and Europe also strengthens North-South relations and business links.
A sky full of new players
Since 2004, 22 new foreign companies have begun offering regular flights to and from Morocco, though European companies are not the only carriers flocking here. In addition to 19 new European companies, including low-cost powerhouses like RyanAir and EasyJet, MENA providers like Libya’s Buraq Air, Ettihad of the UAE and Turkish Airlines have also initiated regular flights to and from the kingdom. Air Arabia, the MENA region’s largest low-cost carrier, just announced plans to set up a new hub in Rabat planned for opening in 2009, featuring a fleet of Airbus A320 aircraft.
Passenger traffic rose 16.5% between 2006 and 2007, and the National Office of Airports (ONDA) has overseen infrastructure improvements throughout the country to accompany the opening of skies above Morocco. The Casablanca and Marrakech airports, the two largest, recently each received a new terminal, while a $880 million investment between 2004 and 2007 targeted other projects including Tangier, Essaouira and Dakhla.
Another provision of the Open Skies Agreement calls for the improvement of security and safety procedures, although one security expert, who spoke on condition of anonymity, pointed out vulnerabilities and ineffective security in the airports. Attacks like 2004’s suicide bombings targeting foreign symbols are the most significant threat to tourism development goals, and the security provisions of the Open Skies Agreement had better bring standards up to international levels.
But in the end, Morocco remains a relatively peaceful, business-minded tourist destination with broad appeal to tourist-issuing markets in both Europe and the Middle East. The country has boldly wagered its future on its ability to attract tourists, although some argue the state risks too much in making economic development dependent on such a fickle industry. No doubt a more diversified economy would be better protected from market fluctuations.
But with a wager this big, the country is making every effort to ensure a smooth evolution towards systematic goals, whose horizons of 2010 and 2012 are suddenly not so far away. The liberalization of the air transport sector has already paid off by raising the number of tourist arrivals, improving the quality of services through allowing in new competition and bringing the country’s airports and servicing fleets up to speed. Morocco’s regional neighbor Tunisia is following in its footsteps, and entered into talks towards its own Open Skies Agreement with the European Union in September.
The liberalization of air transport in Morocco has been, up until now, a well-coordinated effort with a perceivable immediate impact. However, rising oil prices and a downturn in the global economy could pose significant challenges to the air transport sector and to global tourism over the next few years. Already, flights are becoming more expensive as fuel prices hover around the $100/barrel mark, and air companies are forced to add fuel charges to normal passenger fares to absorb extra costs. If European economies continue to suffer the fallout from the worsening financial crisis in the US, the next few years could mean stagnation or decline in the numbers of tourists travelling from Europe to Morocco. When 2010 has passed and the country considers its next round of strategic development plans, it may well apply the same kind of goal-oriented mobilization of both private and public sectors to stimulate other cornerstones of the economy, like the services sector.
