Air transport in Mozambique has new competition rules

9 July 2018

The civil aviation sector in Mozambique, which is in the process of liberalisation, as of the end of August will have new competition rules, under legislation recently approved by the government.

Fastjet, a consortium from South Africa and the United Kingdom, last year became the first foreign-owned company to offer regular domestic passenger flights in Mozambique at the end of last year, linking the cities of Maputo and Beira, and Tete and Nampula.

So far, only state-owned Linhas Aéreas de Moçambique (LAM) has been operating domestic flights, but management problems and lack of airplanes and money to pay for fuel have caused delays and re-scheduling of flights.

At the end of May, the government approved the new Regulation on Competition in Mozambican Air Transport Services, which will enter into force on 28 August, establishing rules for good competitive practices in transport and air services, and sets out practices, agreements or conduct, which have an anti-competitive effect, according to the Regional Coordination of LegisPalop+TL.

The new legislation aims to prevent agreements between airlines and any concerted practice/cartelisation which adversely affects the liberalisation of air transport services in Mozambique and is aimed at obstruction, restriction or distortion of competition.

The decree stipulates illegal anti-competitive practices and agreements including agreements, decisions of associations between air operators and any concerted practice that directly or indirectly determines conditions of purchase or sale or any other commercial conditions, including the prices charged on the routes.

Other types of anti-competitive practices outlined are agreements that limit or control markets, technical development or investment, adding excess capacity or frequency of services, dividing markets or sources of supply, by distributing passengers, territories, or specific types of services and applying unequal conditions for similar operations with other airlines, putting them at a competitive disadvantage.

According to the Regional Coordination of LegisPalop + TL, this Regulation also prohibits the abuse of a dominant position by one or more air operators.

Finally, it provides that the Regulatory Competition Authority, which is also the competent authority for receiving complaints, may exempt companies, air operators and company associations from any specific practices, agreements or decisions which may have been considered unlawful or prohibited, by means of a clarification and proof of market adjustment to air operators and company associations operating in the air transport sector.

In June, during the 6th session of the Joint Commission between China and Mozambique, the Chinese government committed to donate about US$100 million to fund four development projects in Mozambique, including the construction of Xai-Xai airport, in Gaza province. (macauhub)