Johannesburg - An open skies policy in Africa would help recover some of the millions of dollars in losses inflicted by oil price volatility in 2008.
This is according to the CEO of local low-cost airline 1time, Glenn Orsmond.
This policy, if introduced, would allow aircraft to fly through the airspace of other countries, allowing for more efficiency, cost savings for the industry and, ultimately, cheaper airfares.
Even though 1time is said to be South Africa's fastest-growing carrier, it has not been immune to a crippling record oil price, reached in the first half of 2008.
It had said in August that its R6.3m headline loss for the six months ending June largely contributed to the 91% increase in the average rand jet fuel price compared to the same period last year - which had added R140m to the airline's fuel bill.
This was significantly different from the R14.9m profit it reported for the same period in 2007.
On Friday, the International Air Transport Association's (Iata's) regional vice-president for Africa, Lance Brogden, said
that the aviation industry was perhaps in the "worst" crisis ever seen.
The oil price drop did offer some relief for airlines, he said, "but people have to remember that it is also a tell-tale sign of a slowing economy".
Airlines have already been struggling with lower traffic volumes as economic pressures have had a negative impact on consumers' disposable income.
"So whatever operational savings airlines generate, it will likely be surpassed by revenue lost. For 2008 we expect losses of $5.2bn, of which $700m of that on this continent," he said, adding that the "brutally high fuel costs" will total $186bn for the entire industry in 2008 - four times more than what it was in 2003.
Open skies could reduce fares by 50%
Orsmond said that opening up the skies should reduce airfares by 50% and stimulate market growth by 50%, adding that current policies and resultant airfares will prevent Africa from enjoying the 2010 Fifa World Cup as spectators.
The SA government needs to follow an open skies policy in Africa, like governments in Europe and North America, to
mitigate high costs and give relief to cash-strapped consumers who wish to travel by air, he said.
In March 2007, the open skies agreement between the EU and the US - which allows any EU-registered carrier to fly to a US destination, and vice versa - was given the thumbs-up by authorities.
Iata said: "Airlines need greater commercial freedom to run their businesses as real businesses and serve passengers effectively. The agreement between the US and the EU is a step in the right direction."
UK publication The Guardian reported that air passengers could see more choice and lower fares after the open skies treaty liberalising transatlantic air travel came into force in March 2008.
It cited Iata, which said that there will be 7 000 more seats a week on flights between London and New York: "Open skies will increase traffic between the US and the EU by one-third to 37.5 million passengers a year by 2011."
Last month, 1time competitor Comair told Fin24.com that one of the biggest constraints is that all the routes across Africa are tied up by governments, and that it would help if open skies came into effect.
- Fin24.com