Various airlines discuss aviation issues in South Africa

Management and representatives from various airlines, aviation regulators, and other service providers convened in Johannesburg last week, to discuss matters relating to the sector.   

The Board of Airline Representatives of South Africa (BARSA) Aviation Summit was held in Houghton, on 7 and 8 March.

REPRESENTING AIRLINES

BARSA represents the interests of international, regional, and local member airlines and other roleplayers in the aviation space. Also included are ground handlers, government, and airport operators.

The organisation meets annually, bringing private and public role players together to collaborate, share ideas and discuss challenges.

This year is BARSA’s tenth anniversary, which meant there was reason to celebrate ten years of collaboration and bringing about change in the aviation landscape.

THE WORLD ECONOMY

Renowned economist Daniel Silke spoke about the state of the global economy. Most parts of the world should see growth in 2024.  

Economic growth for many African economies is projected to be over 3 percent this year.

However, South Africa’s economy is not expected to shoot the lights out, with a projected growth rate of around 1.3 percent. This figure was obtained from the National Treasury.

Furthermore, the country’s GDP per capita is dropping due to elevated electricity costs, the rising cost of fuel, and other price increases.   

This inflationary situation impacts the aviation sector because consumers cut back spending on tourism and flying.

PROTECTIONIST BEHAVIOUR

Protectionist behaviour in many states leads to unsustainable trading conditions for roleplayers in the aviation sector.

Dr Namhla Tshetu of privately owned Airlink spoke about the challenges of operating an airline in Africa.

Tshetu said that over 400 airlines operate in Africa and that around 55 of them are state-owned carriers.

She explained that protectionist behaviour and anti-competitiveness arise when governments play the role of both shareholders (operators of airlines) and regulators of aviation.  

IMPROVEMENTS IN AVIATION

Tshetu highlighted the progress being made in liberalising aviation regulations in South Africa.

She mentioned granting rights for foreign airlines to pick up and transport passengers from third countries to destinations in South Africa. This is also known as Fifth Freedom Rights.

She spoke about the recent placement of South Africa’s Air Services Licensing Council (ASLC) under the Department of Civil Aviation (DCA) domain.

This council, responsible for the issuing of permits to airlines, was previously incorporated into the Department of Transport. Lengthy processing often hindered progress in issuing these permits.

CHALLENGES FOR AVIATION SECTOR

The African continent has around 20 percent of the world’s population. However, Africa holds just 2 percent of the world’s aviation.

Dr Alex Stancu, Area Manager: South & East Africa International Air Transport Association (IATA) spoke about challenges and opportunities within the region.

Stancu said that aviation in most regions of the world had returned to pre-Covid levels but that this was only expected in Sub-Saharan Africa by 2025 or 2026.  

HIGH OPERATING COSTS

Stancu said that several factors hinder airlines operating in Africa. He pointed out that airfares in Africa cost around 30% more than fares in other parts of the world.

This is because Africa is an expensive place for airlines to operate. Many of the industry’s costs including fuel and aircraft leasing or ownership are priced in US Dollars.    

OPPORTUNITIES FOR SOUTH AFRICA

Stancu stated that looking ahead, there are opportunities for South Africa to produce cleaner aviation fuels.

The country has unique feedstocks that can be used to produce Sustainable Aviation Fuel (SAF).

According to a study by the World Wide Fund for Nature (WWF) South Africa has the immediate potential to produce between 3.2 and 4.5 billion litres of SAF annually.

However, South Africa will need to level up knowledge and resources on sustainability to do this.

In addition, this could open up job creation initiatives for the country which has an alarmingly high unemployment rate.

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