Southern African airlines suffering still from Covid and still needing support

17th October 2022 By: Rebecca Campbell - Creamer Media Senior Deputy Editor

Although the Covid-19 pandemic had now passed, the Southern African airline industry was still suffering from its consequences, Airlines Association of Southern Africa (AASA) CEO Aaron Munetsi has warned. He was addressing AASA’s fifty-second Annual General Assembly, at Kleinmond, south east of Cape Town, on Friday.

“[W]e are still suffering with our own long-Covid symptoms,” he highlighted. “Most airlines and service providers took on additional debt to stay afloat. Most, if not all of them shed jobs temporarily or permanently in order to manage costs. This resulted in institutional knowledge, advanced skills and expertise being lost through retrenchments, retirements and relocation. At the same time, demand for skills development, job creation, transformation and environmental compliance are undiminished. These all require significant investment at a time when rising interest rates are pushing the cost of borrowing and finance while fuels and other inflationary pressures are tightly squeezing margins.”

Given that the revised gross domestic product forecasts for Southern Africa were trending down, and given the very important role in the region’s economies played by aviation, travel and tourism, he again called on Southern African governments to treat these three interrelated sectors “with the importance they deserve”. He noted that, during the pandemic, the governments had often made the “right noises” but failed to deliver in practice.

The sector still needed financial relief. He recognised that the fiscal resources available to the regional governments were shrinking and that other sectors were also seeking assistance. But there were many statutory charges, levies and taxes that were imposed on air transport and travel that governments could waive, lower, hold steady or even scrap. “Any increases in these costs will be detrimental as the industry is beyond saturation.”

He also highlighted the importance of the Single African Air Transport Market (SAATM). “The potential benefits of the [SAATM] have been widely publicised and discussed. The African Civil Aviation Commission continues to advocate for the full implementation of SAATM. However, it is clear SAATM is still some way from becoming a reality and in the meantime we have to utilise the existing bilateral and regional instruments to ensure that these benefits are brought to life and experienced as widely as possible.”

Although he congratulated South Africa on its equitable treatment of all airlines, he pointed out that other countries in the region did not follow suit, imposing “prejudicial requirements” on other airlines, in order to protect their own national carriers. He urged the South African government to insist that the South African airlines designated to fly to those countries be treated equally with the local operators.

“Government promise to slash red tape to become more business-friendly, yet these are some of the low-hanging fruits that will lubricate the flow of legitimate people and goods between and across markets,” affirmed Munetsi. “By providing these positive travel and trading experiences, we will become more competitive and attractive in our own right, but crucially, also as destinations and markets for investment, tourism and commerce.”