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Geneva – An effective airline in a competitive market will lead to a whole range of airfares reflecting market friendly developments,” Tony Tyler, CEO of the International Air Transport Association (Iata) told Fin24.
In his view this kind of approach would be a good one to try in the South African aviation industry as well as the rest of the world.
“Airlines which are state owned often get political decisions made for them, especially if state airlines start losing money,” said Tyler.
“It is a pity that there has been such a lot of instability at senior management level of South African Airways (SAA). That is not helpful in a big business. Someone needs to be appointed for the long term and the airline needs to be allowed to run without political intervention.”
He said the value of the aviation industry for a country’s economy is often not understood in Africa where fuel taxes and other taxes in the aviation industry is often too high and used as short term fixes for Treasury problems.
“My message to these kinds of airlines are ‘you have nothing to lose except your losses’,” said Tyler.
“If airlines need financial support to survive, then there is a connectivity problem. Whereas, if you open up your skies, you create more opportunities for your own airline too.”
He said markets have the ability to satisfy demands and one would be surprised at what could happen if an aviation industry is liberalised.
This includes the possibility of a local airline turning out to be more resilient in an open market than was previously anticipated.
This lack of opening up the African aviation industry is preventing a lot of opportunities from being realised for the continent.
“Why would you start an airline in Africa if you cannot fly anywhere?” asked Tyler. “But if there is an open market, smart people will go there and trade will happen, which will bring huge benefits.”
He also pointed out that it is important in Africa that when new aviation infrastructure like airports are being built, it is relevant to the industry and not wastefully too large and costly for what is actually required.
In response to a question on the negative impact South Africa’s change in visa regulations has had on the tourism industry, Tyler said he agreed that child trafficking is not good, but the way the government tried to tackle it, had unintended consequences.
“Iata urged the SA government beforehand to think carefully before implementing these new regulations. These unintended consequences can be avoided if one consults with industry bodies like Iata beforehand,” said Tyler.
