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Airline boss expresses concern about new draft national civil airlift strategy

PRIVATE SECTOR A Boeing 737-4S3 of low-cost carrier Kulula, part of the Comair group

PRIVATE SECTOR A Boeing 737-4S3 of low-cost carrier Kulula, part of the Comair group

Photo by Duane Daws

20th March 2015

By: Keith Campbell

Creamer Media Senior Deputy Editor

  

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Comair CEO Erik Venter has expressed concern about South Africa’s draft 2015 to 2020 Airlift Strategy, which covers commercial aviation. (Comair is the country’s largest private-sector airline group.) This draft follows on from the 2006 to 2011 Airlift Strategy, whose mission was to maintain a competitive civil aviation environment, maintain safety in the sector (using international standards), provide reliable and efficient services, improve service levels and improve cost and contribute to the socioeconomic development of the country and region.

He had no problem with the purposes of the new draft strategy – to align aviation with National Development Plan (NDP) priorities (dealing with inequality, poverty and unemployment) and to further promote travel and tourism to and from this country. “It’s a thinner version of the 2006 Airlift Strategy, with the same mission,” he observed. “But the focus is entirely on international travel.”

Rather, he was concerned with the basis of delivery on the draft 2015 strategy objectives. “[T]he approach is fundamentally flawed.” It displayed, he argued, a “silo approach” to meeting the objectives of the NDP through aviation, and particularly doing so through the State-owned South African Airways (SAA), rather than maximising inbound tourism through whatever means are most effective, which had significant potential to create jobs and earn foreign currency.

Venter affirmed that he was concerned that this approach of using SAA was based, in part, on misperceptions. Thus, the airline was credited with contributing R9.2-billion to the national gross domestic product (GDP), maintaining 35 000 jobs in the supply chain and 44 000 tourism jobs. But, he pointed out, if SAA disappeared, other airlines would fill the gap with little, if any, damaging effect on the GDP and job totals.

Again, the Airlift Strategy asserted that the potential role of national carrier airlines in the development of their countries, including tourism, was demonstrated by countries such as Australia, Mauritius, Singapore and the United Arab Emirates. “[B]ut,” he cautioned, “it is very dependent on the circumstances of the country.”

Another example was the statement in the Airlift Strategy that SAA was falling behind the airlines of the other Brics (Brazil, Russia, India, China and South Africa) countries in terms of passenger numbers. This, Venter noted, ignored the fact that South Africa had a much smaller population than the other Brics states.

He argued that the aim of the strategy should be to get as many people to South Africa as possible, to stimulate the wider economy and create more jobs. If this meant having to rely on foreign airlines, rather than protect SAA, so be it. SAA was struggling to compete with major international airlines on intercontinental routes, in terms of both economies of scale and ticket prices. Foreign carriers would still maintain supply chain jobs in South Africa, but would be no burden on the country and the opening up of bilateral rights, while to the detriment of SAA, would result in significantly more capacity into the country.

To these ends, there were two fundamental questions that should be asked, which would frame the development of an Airlift Strategy that would fulfil the objectives of the NDP, he affirmed. The first was: how to bring the maximum number of travellers to this country, at the most affordable prices and at the least cost to the taxpayer. The second was: how to reduce barriers to expanding the country’s tourism sector. This embraced issues such as visas, taxes and airport charges, the shortage of skilled personnel (including immigration personnel) and safety perceptions. However, this required a significant level of cooperation between the departments of Transport, Tourism, Home Affairs, Labour and Finance to prevent departmental priorities from conflicting with national objectives. In this regard, he is of the view that the 2015 draft Airlift Strategy remains very focused on the priorities of the Department of Transport.

Equally important, the relevant government department strategies should promote private- sector involvement in developing tourism and travel services and incentivise the concomitant commercial risk taking and job creation.

Venter was speaking at the recent Transport Forum Special Interest Group conference at the University of Johannesburg.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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