'Airlines in crisis'

2012-10-26 13:02

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The future of air transport in Southern Africa is dependent on the alignment of government policies and industry strategies, including reforms to competition and ownership rules that
would stimulate growth in the sector, according to Airlines Association of Southern Africa (AASA).

This was the consensus reached at the association's AGM and conference held in Maputo, Mozambique - attended by over 200 industry leaders and government policy makers.

“Although this performance seems consistent year on year, indicating that Africa’s airlines are, to some extent, immune to fluctuating global economic fortunes, it is clear we are not making progress.  We are still making losses and the prospects for a sustained turnaround are not evident, even if there is a global upswing.  Within Southern Africa, and more specifically in South Africa, we are in crisis,” AASA CEO, Chris Zweigenthal said.

The meeting took place against the backdrop of a gloomy outlook for Africa’s airlines, which are expected to record a combined US$100m (about R877-million at R8.77/ $) loss this year.

“The trading environment for airlines has never been tougher...  Some airlines are achieving relative success, but within South Africa Velvet Sky ceased operating, 1time is in business rescue and SAA is experiencing major challenges of its own. In addition, Air Zimbabwe and Air Malawi are operating limited services and working on turnaround strategies,” he added.

Citing the rapid growth of Etihad, the Abu Dhabi-based carrier, Zweigenthal said it offered a valuable lesson on the importance of strong partnerships and the alignment of policy and strategy, which should be applied in Southern Africa,  “The secret to their success – partnerships – in every aspect of their business.  This starts with their Government, where there is complete alignment, agreement and trust of each other on the strategy in respect of trade, tourism, marketing, education, etc. within the UAE, and the positioning, growth and development of their airline.  It’s a question of working with rather than against each other.  It’s about recognizing each other’s strengths and leveraging these for the benefit of their whole.”

While airlines, ACSA, ATNS and the Dept of Tourism had established a better understanding of each other and a constructive relationship, Zweigenthal said there was “an urgent need to identify a common agenda across other government departments and bodies which impacted on the air transport sector - specifically Transport, Finance, Public Enterprises, Environment, Trade & Industry, Home Affairs, Health, Education, International Relations and Civil Aviation Authorities - in order to achieve the objectives and goals in the interest of the respective states and the aviation industry".

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