Africa’s skies are getting busier while SA is still playing catch-up
Most of the continent has regained its pre-Covid air traffic levels but, experts say, protectionism favouring SAA is stifling South Africa.
Airline traffic in the rest of Africa has recovered to pre-Covid volumes, while southern Africa is lagging far behind. In particular, the skies above South Africa have been significantly quieter since the pandemic, with international arrivals down on pre-Covid levels by more than 1.3 million last year.
A leading airline economist says that’s because South Africa (and a few other countries) are trying to stifle competition. Those that are thriving have opened their skies.
The latest data from the International Air Transport Association (Iata) reveal that in general – and although they only account for 1.7% to 2.1% of the world’s air transport – African airlines have experienced a rapid recovery this year, seeing 87.1% year-on-year growth in revenue passenger kilometres (RPKs) in Q1. That brings their RPKs to only 9.4% below 2019 levels.
Some countries are no longer playing catch-up: they have caught up and are growing their air transport (and their economies).
Contrast that with southern Africa, which, as a region, is faring very poorly. Iata puts this down to “long-standing structural and profitability challenges” which are hurting the sector, and South Africa, a major African economy, is faring dismally.
The association says passenger numbers in South Africa in the first quarter of 2023 were still 12% below 2019 levels and scheduled seats were even further behind, by 27%. However, it notes that there has been a significant improvement from the traffic and capacity deficits observed in the last quarter of 2022.
Powerhouse economy Nigeria’s passenger traffic and seat capacity have overshot 2019 levels by almost 60% and in north Africa, Egypt and Morocco experienced a substantial increase in passenger traffic during Q1 2023 of 29% and 20%, respectively, compared with the same period in 2019.
Ethiopia has seen passenger and airline seat levels of 19% and 14%, respectively, above pre-pandemic figures.
Africa’s rapid recovery in traffic has been complemented by the region’s advancements in connectivity and airline competition, says Iata, adding that, to take full advantage of aviation’s contribution to economic development, efforts to liberalise aviation in Africa must intensify.
SAA fails to take up its allocation
That is at odds with the views of SAA’s new CEO, John Lamola, and with the government’s policies.
SAA is failing to take up its allocation of bilateral air services agreements, which has created a situation in which international airlines are flying at their maximum permitted levels and cannot increase their flights, and yet the government-owned carrier, SAA, is unable to service international routes.
Later this year, SAA plans to fly to Guarulhos International Airport in São Paulo four times a week, with two direct flights out of Cape Town and two from Johannesburg. It is not yet known how it plans to service that route because it is believed that the airline does not have enough planes. It is also not known whether it has managed to secure further aircraft.
When asked about the airline’s capacity to service international routes (it also plans flights to Australia and other destinations) and its CEO’s views on competition, SAA’s spokesperson was unresponsive.
Airline expert Linden Birns said, “Since March 2020 [SAA] has not been operating any of the intercontinental routes it has the licences to serve.
“The bilateral air services agreements SA signs with other countries place a limit on the number of airlines that the countries can award route licences to and also impose ceilings on the number of flights a week, the destinations that can be served and in some instances the total capacity permitted.
“So we have a situation where the airlines of the other countries are flying the maximum permitted under the respective bilaterals, but SAA’s allocation is not taken up.”
Other airlines based in South Africa do not have the aircraft or infrastructure to operate long-haul intercontinental flights, which is why they focus on domestic markets and destinations within four hours’ flight time from Joburg, such as Nairobi, Luanda, Kinshasa and Dar es Salaam.
Birns says the most cost-effective solution for South Africa would be to renegotiate its bilateral air services agreements and make them less restrictive for foreign carriers wanting to serve SA.
“From an economic development perspective, the tourism and trade sectors are airline-agnostic. What matters most to them is that people come to the country in increasing numbers and spend their money here.”
Passengers don’t care about the carrier – they care about the price, the service and the perks offered by an airline.
But SAA’s Lamola doesn’t subscribe to this view. In May, he told the Air Finance Africa Conference that South Africans chose which airline to fly on based on patriotism and that foreign airlines had been given too much access to our market. Lamola has also described international airlines as “cannibalising” the South African market.
And yet, in a free market, service and price drive competition, according to aviation specialist Dr Joachim Vermooten.
“Countries that have liberal regimes do better than those that don’t. Africa has a sparse market in terms of passenger markets. In a small market, you can achieve a higher percentage increase pretty quickly compared to a larger market, which will take some time to recover,” he said.
Airlines were competitive, he said, when they had the ability to compete with other world-class airlines.
“What Lamola is asking for is a protectionist policy and transport policy to restrict market access for the airlines in favour of SAA, hoping SAA will be able to participate in the world market,” he said.
“If it wasn’t for international airlines, South Africa would not be able to participate in international connectivity whatsoever.”
Vermooten said one should not try to turn the clock back to the 1960s, when national carriers guarded their own markets.
“We’ve come a long way since that,” he said. “Most of the larger network airlines have grown substantially since then, despite the advent of more open air transport policies.” DM