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Dublin - The South African aviation industry's most pressing issue is sustainability and the need to inspire long-term confidence, Chris Zweigenthal, CEO of the Airlines Association of Southern Africa (AASA), told Fin24 on Wednesday.
"There are differing levels of performance and success, both from an airline as well as a consumer perspective," he said, ahead of the official opening of the 72nd annual general meeting of the International Air Transport Association (Iata) taking place in Dublin this week.
"Airlines in the SA aviaton industry must make sure they are able to compete. Yes, competition is essential, but they must be able to compete on a sustainable and a profitable footing."
He said the challenge in the SA industry at the moment is that it is in a non-growth phase from a financial results perspective. Although there is growth in terms of passenger numbers, it is at low yield levels due to competition and spare capacity offered by all airlines. The impact of the weak rand on dollar-based costs also adds to higher costs and lower profit margins.
"Iata predicts that African aviation will still be loss-making in 2016, even with the global industry expected to make near record profits during the year. There are pockets of success in the African aviation industry, though, like Ethiopian Airlines and some airlines in South Africa," explained Zweigenthal.
"Consumers need certainty that if they buy a ticket, they will be able to fly. It is the image of the SA industry that I am concerned with - when a promise is made, it must be delivered on."
As for Iata, he said it is important for AASA as the representative association of airlines in the southern African region to support the international association's global mandate. That is why the AGM is important for him as a place to network with industry leaders and also to meet CEOs of AASA airline members - in particular CEOs of non-SA airlines - to ensure the association can add value and meet their needs.
AASA also supports the global market-based measure regarding carbon emissions which Iata is proposing, and the need to find a solution at the Icao assembly later in 2016.
"In SA the intention is to introduce a carbon tax on aviation, but we see that an international solution in the form of a global measurement system might be a better base. We have also been very involved in the development of a BEE charter for domestic aviation, and we will also support Iata in the finalisation of such a BEE charter for aviation in SA regarding foreign airlines," concluded Zweigenthal.
* Fin24 is a guest of Iata at its AGM.
