AFRICAN airlines are
expected to lose
another US$300m
(R4,4bn) this year,
representing the ninth
straight year of losses for
the continent.
Iata statistics reveal
that nine of 25 airlines
in Southern Africa are
unprofitable, six are
profitable, while the financial
results of the remainder
are unknown because they
don’t post their results.
At the same time, Africa’s
passenger growth exceeds
the global average: 4,1% in
Africa versus 3,3% globally,
and low-cost carriers have
a growing share of 65% of
the South African domestic
market, indicating the
market’s growth potential.
Addressing the question of
“What’s stopping us?”, Aasa
ceo, Chris Zweigenthal,
said challenges that
continued to prevent local
airline profitability, included:
Intense competition
from foreign carriers,
resulting in lower yields on
international routes;
High dollar-based
costs, including aircraft
leasing and financing,
distribution, maintenance,
infrastructure service
provider costs, and 35%
more expensive jet fuel;
Inconsistent policies
within and between African
states, leading to slow
progress with via waivers
and visas on arrival; and
The reappearance of
Afro-phobia in South
Africa putting a damper
on arrivals and business
confidence.
“Airlines must narrow the
delta between costs and
revenues by increasing
aircraft utilisation, raising
productivity and reducing
other costs. This will enable
them to offer competitive
services at fares that
cover their costs, a move
toward sustainability,” Chris
stressed.
He urgently called on
the leadership of the
African Union to resolve
differences holding up
the implementation of the
Single African Air Transport
Market (SAATM).
Iata senior vp member
& external relations,
Paul Steele, agreed a
mind-change was needed
among African airlines
and governments to stop
viewing each other as
competitors and collaborate
as envisaged by SAATM.
“Every single airline in
Africa always complains
about a level playing field,
but they want the benefits
for themselves, not for
everybody else.”
‘What’s stopping us?’
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