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Unaffordable!

Special Report - Southern Africa

Chris Zweigenthal, CEO of the Airlines Association of Southern Africa, (AASA), details the challenges facing airlines in southern Africa

How damaging would the proposed increase in airport charges be to aviation in Southern Africa?

The draft permission recently announced by the regulator amounts to a doubling of the passenger service charge, as well as landing and parking charges over a two year period, with a 59.9% increase in the first year of the permission and a 24% increase in the second year. 

This increase is unaffordable for the airlines. The increase in operating costs cannot be easily absorbed into the airline fare immediately, and will effectively be a direct operating cost impacting the profitability levels of the airlines.

The step change increase in the passenger service charge will be immediately felt by the passenger, and will potentially adversely influence the passenger’s propensity to travel. So it is expected to have a negative impact on passenger growth.  

Is the new airport at La Mercy (Durban) necessary, and did the Airports Company South Africa (ACSA) do an adequate job in consulting airlines?

A new airport at La Mercy would probably have been required at some point in the future. However, the timing of the construction appears to have been largely driven by official government directives, and a requirement to have a new airport at La Mercy in operation for the FIFA World Cup 2010, to be held in South Africa during June/July. 

In the interest of extending the life of existing assets and reducing capital expenditure, we believe that with some reasonable investment the life of Durban International Airport could have been extended by up to five years. 

Consultation by ACSA with the airlines only really commenced four months after the award of the contract for the construction of the airport. By this stage, the overall design was complete and the footprint of the airport was fixed with construction of the foundations having already started.

The airlines had little opportunity to influence the airport design without incurring substantial increased costs, and potential contract time delays. Consultation revolved around ensuring airline operational requirements were accommodated, and preparing the stakeholders for the move to the new airport.

What of other airport infrastructure in the region?

Outside of ACSA airports, the airports in South Africa are all privately owned. These airports are well supported not only by scheduled commercial airline operations, but also general and business aviation.

Within the region, outside the borders of South Africa, many airports are currently upgrading their facilities in response to expected growth, and in anticipation of World Cup traffic. Examples are airports in Mozambique (Maputo), Botswana (Gaborone), and the construction of a new airport in Swaziland.

Air Traffic and Navigation Services (ATNS) has also proposed price increases. How should air traffic management in southern Africa be developed?

The proposed ATNS increase of 42.6% in the first year of the permission proposed by the regulator is also unaffordable for the airlines and far higher than expected. Notwithstanding this, ATNS is recognized throughout Southern Africa for its high standards of air traffic management and initiatives in the region, not to mention the VSAT project undertaken in partnership with IATA.

Air Namibia has been granted fifth freedom rights and now competes with South African Airways on certain routes. What is your view of liberalization?

AASA fully supports liberalization of the skies of Africa, and the implementation of the Yamoussoukro Decision (YD). Unfortunately, progress with its full implementation is extremely slow due to delays in the establishment of the Executing Agency under the African Civil Aviation Commission, and the Regional Competition Authorities. 

We have serious doubts that the YD will be implemented in its envisaged form. However, informal implementation by like-minded States that see the benefits of liberalization is starting to take place, and the fifth freedom rights granted to Air Namibia is one such example. 

The Southern Africa Development Community (SADC) states are in general somewhat behind other areas in Africa regarding exchange of fifth freedom rights.  But we expect more such developments as it should begin to indicate the benefits of liberalization for growth and development of aviation.

Is safety still an issue? Can more be done to help airlines in the region?

Unfortunately, a few incidents towards the end of 2009 reflected in declining statistics over the full year. Safety remains a high priority for airlines in Africa, and they are determined to improve the safety record to be at least comparable if not better than the IATA figure (one accident every 1.6 million flights). 

IATA airlines in Africa are committed to the IOSA process, and it has contributed to improved safety awareness and actions in the region. Improvements in safety have also taken the concerted efforts of ICAO, AFRAA and AASA, which have communicated continuous awareness among stakeholders. All states have focused on measures to improve safety.

One initiative, which I believe contributed to the improvement of safety, was the introduction of Reduced Vertical Separation Minima in Africa which required all states to compile updated National Safety Plans for approval by ICAO and IATA, and forced all states to focus on improvement of safety.

Do you agree on a global, sectoral approach to the environment through ICAO? And how should your airlines view the European Emissions Trading Scheme?

AASA supports the global sectoral approach to the environment through ICAO. Our position on the environment is certainly aligned with that of IATA, and we do not support the European Emission Trading Scheme in its current form. We regard it as another means to effectively tax the airline industry without any assurance that the true objectives will be achieved and that any revenue generated will be channelled back into the cause of aviation initiatives on the environment.


 

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