Opinionista Wayne Duvenage 11 June 2021

Favouritism in flight: The uneven playing field of South Africa’s aviation industry

South Africa’s aviation industry is a classic case of the state abusing its position as the player, referee and spectator. Tapping into Treasury’s purse, year after year, the state-owned airlines are bailed out to stay afloat, while the private airline industry players are forced to survive with their shareholders’ funds, finding more shareholding or depleting whatever cash reserves they have left.

In many countries around the world, the pandemic-induced economic crisis placed numerous airlines on the brink of collapse. While some were unable to survive, the governments in many countries committed to saving their aviation industries by doing all they could to assist all the participants on a pro-rata basis. 

But not here in South Africa. Instead of ensuring the South African registered airline players remained healthy through various options and provisional assistance, the South African government decided to only look after their two defunct and perpetually lossmaking airlines (SAA and Mango), while placing the third smaller cousin of SA Express out to pasture. 

Add to this backdrop, there is substantial evidence of bias by a few of the state’s oversight and management bodies, whose roles to ensure safety, sustainability, accessibility and flying convenience is applied evenly to all industry players. Among other things, these bodies ensure that all carriers are correctly licenced, financially sustainable and are approved to fly on certain routes with required permissions for access at the various airports around the country. 

You could be forgiven for believing the regulations, rules and treatment of airline operations ensconced in these various oversight bodies are applied relatively evenly to ALL aviation industry players in SA. Yet they are not. 

The state’s airline companies receive substantive credit from the Airports Company SA (Acsa), but not the private airlines, which would be grounded immediately if they did not pay their landing, parking fees and passenger service fees to Acsa. But not so for Mango and SAA and, instead, they receive special credit treatment of these running costs, going so far as to having their debt reflected as irrecoverable by Acsa. 

Throw into this already lopsided playing field, the International Airline Services Council (IASC), a state entity that reports into the Transport Ministry and oversees the fair allocation of operating licences for routes into and out of South Africa. In the scenario of a private airline having to halt its operations (for example, due to financial woes), and thereby cease to operate along certain routes – such as that of Johannesburg (OR Tambo) and Zanzibar for months – a state airline’s request to take over the unserviced route would have been entertained by the IASC with little hesitation. But not so the other way around. 

Mango and SAA have ceased to fly a number of routes into and out of SA, for months, and yet, despite many requests by private entities to be granted authority to take them up, nothing happens. Instead, SAA and Mango lie idle while the flying public, cargo, tourism and business that rely on these regional and international routes are expected to just suck it up. Think of the negative impact this conduct has on our economy. Jobs in tourism, freight forwarding, airline services and so much else suffers from the irresponsible action.  

It’s probably more convenience than coincidence that the Transport Minister is very lethargic in its replacement of the outgoing board at the IASC, who since April has been inquorate and unable to fulfil their mandate of approving applications for these route licences. 

Turning to the conduct of another state oversight entity, the South African Civil Aviation Authority (Sacaa), they too have been found wanting in their fair treatment that favours the state’s airline. A classic example is the recent treatment of CemAir in 2018/19, a small private airline whose fleet of aircraft was grounded by Sacaa for several months, due to an airworthiness administration matter, which was appealed to the civil aviation authority. The outcome ruled against the state, setting aside the grounding and called the civil aviation authority’s decision “irrational, arbitrary, unreasonable and procedurally unfair”. The likelihood of such treatment being meted out to SAA or Mango by Sacaa is next to zero. 

Predatory airlines

This favouritism towards the state carriers is predatory and a worrying situation. It makes one wonder how far they will go to allow the state to operate un-flightworthy aircraft or flying crew. Another more recent incident involved the SAA Airbus 340-600 flight on 24th February to fly to Brussels and collect a pallet of vaccines. To enable this specific flight, Sacaa bent a number of safety precautions and requirements to make it possible. In addition, they have failed to apply their own rules that stipulate they will provide a preliminary report to the public within 30 days, regarding safety incidents that transpired during flights. 

Sacaa has not done themselves any favours when it comes to the reporting of a serious safety incident on this “vaccine” flight, which we gather that were it not for sophisticated automation intervention, this flight may have stalled and crashed on take-off. Sacaa remains mum, however, would they do so if this was a private airline? Somehow I think not. 

The state often defends its position to keep its failed airlines afloat, on the basis of keeping people employed. Yet it has been the states airlines that have shed the most jobs during the economic crisis, while the private companies that managed to avoid business rescue have done a sterling job to hold on to most of their employed personnel. What the state doesn’t want to acknowledge is that jobs lost from their airline closure give rise to new jobs created by competing airlines that take up those lost seats. Furthermore, SAA Technical could be privatised tomorrow, with its sale (partially or in whole) to the private sector, and the chances of its people remaining employed in a growing and healthy company will be a lot more likely than if it remains in the SAA fold. 

It would appear this conduct by the state and its various players, is part of a broader ploy to make it more difficult for private airlines to operate, thereby reducing competition in favour of the state’s lethargic entities.

As society, we must be aware of the various elements that point to a game the state is notorious for, being that of bullying and forcing business to comply and stay in their lane, while allowing different rules for state airlines. DM

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All Comments 12

  • I read this report with growing despair. Is there absolutely nothing that the ANC government has not run into the ground? And the sheer arrogance with which it is done ….

  • An insightful article. The Presidency needs to urgently step in, just as it did yesterday to open up the energy generation sector, and restructure the aviation industry to level the fields between SAA and the private sector. Without doing so the aviation industry will continue to operate on the margins which is not good for attracting new investments.

  • It is so sad but confirms the ANC focus on the NDR and a state-controlled economy. It must be clear to every ANC leader that the economic policies taught by their comrades in the late USSR have not produced “better lives for all.” On the contrary, the results prove the exact opposite. Any leader with even a moderate IQ would look at the economic successes and failures of developing nations around the world, and copy the success stories. I cannot understand why anyone would follow an “economic recipe” that has failed far more often than it has succeeded, when easier, simpler successful solutions are there for all to see.
    Copy Singapore, not Venezuela. Copy South Korea, not North Korea.

    • The people and governments in Singapore and South Korea are obviously intellectually more progressive than we have here in SA?

      • Furthermore, once adopting a position, adjusting to make improvements is not ANC policy. Dig in the heels and push back is ANC policy – no matter whether it runs the country into the ground or not. Sad!

  • Consumers should vote with their bookings.

    Eventually, if there were an SAA crash, the headline would read that the crew and 17 other state workers perished.

  • There are some lucrative regional routes that the govt is probably eyeing as monopoly routes for SAA. Expect very expensive travel to African destinations.

  • Dont worry Wayne. No one with cash or brains will buy a seat on State airlines. The govt people that do fly don’t pay their bills either. And when they crash it will be private EMS that picks them off the ground. Given that someone as totally useless and corrupt as Dudu Myeni was running SAA, who in their right minds would buy a ticket in their planes.

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