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What Southern African airlines need to compete – expert

Approximate reading time: 3 minutes

To be competitive, Southern African airlines – and the destinations and economies they serve – must differentiate themselves through excellent customer service, efficiencies and value-for-money travel, trade and tourism propositions.

This was the message from Chris Zweigenthal, CEO of the Airlines Association of Southern Africa’s (AASA) at the opening of its 48th Annual General Assembly taking place in Zambia this week.

More than 200 airline industry leaders and government officials are meeting to discuss responses to various threats to the competitiveness and sustainability of carriers in the Southern African Development Community (SADC) region.

Challenges include global, regional and local political uncertainty; market turbulence; and rising costs which take their toll on trade, tourism and economic development.

AASA represents 19 airlines. Its 34 associate members include the major aircraft and engine manufacturers, airports, air navigation services, meteorological services and other partners to the air transport industry.

According to AASA, demand for air transport is set to increase slowly by 2% to 3% annually over the next five years, reflecting weak gross domestic product (GDP) performances in the region.

“For the aviation industry to expand and fulfil its potential in supporting jobs and enabling economies to become stronger, passenger growth must return to levels greater than 5%,” said Zweigenthal.

“To accommodate the volumes, we will need to operate more flights. This will require appropriate investments in modern aircraft, in airports and in airspace management infrastructure and systems.”

Airlines in the Southern African Development Community (SADC) are expected to report a collective loss of $300m this year, the Airline Association of Southern Africa (AASA) predicts. This is while the global air transport sector is on track to return a $33.8bn profit in 2018.

That is why Zweigenthal urged the entire value chain in the aviation industry to work together to keep air travel safe; contain and reduce costs; create hospitable visa and immigration regimes; mitigate and reduce the impact on climate change; and establish stable, safe and secure physical and cyber environments.

AASA identified other handbrakes applied by governments which impede air travel, tourism and their ability to deliver growth. These include airlines’ inability to repatriate their revenues from a handful of African countries, including Angola, Zimbabwe and Mozambique.

Laws on cybersecurity and personal data protection was another. Few African states have drafted or promulgated cyber and data protection legislation.

Those that had been passed were inconsistent, while airlines in Southern Africa were now also required to comply with the European Union’s General Data Protection Regulations if they sold or marketed services and products to EU citizens and residents.

“Tourism, along with trade, is a powerful lever of growth. But they are being stunted by uncertainties,” said Zweigenthal.

“As one of the most capital-intensive sectors and a vital enabler of economic activity, the airline industry needs Southern African governments to clarify their local economic reform policies, so they do not spoil the appetite for much needed trade and investment in the region.”

Source: fin24

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