Lonrho column

1278

More Africans are flying and are they doing so more often. Boeing predicts that the number of commercial aircraft needed to sustain Africa’s demand will at least double by 2031. That’s an incredible statistic.

Airlines in Africa generally benefit from not having to compete with inter-city rail or long distance driving, as airlines do in Asia, continental Europe and the US. Further to that, Africa’s airlines benefit from the fact that air travel revenues are proven to increase at a faster pace than domestic growth (GDP). Operating an airline in Africa, with a hub at one of the world’s best airport facilities, at a time when the continent’s growth is estimated at 5.5%, should be a recipe for success. So why is SAA failing and should we care?

The beleaguered South African national carrier has incurred losses amounting to R17bn since the early 1990s and is now putting together a new board and looking for a CEO. The management team suggests its failings are due to high fuel and lease costs, but those are hardly unique challenges to SAA. Their assertion that airport charges in South Africa are disproportionally high may well be true, but if SAA as a government-owned carrier can’t persuade ACSA to contain their charges, then there is little prospect for the private sector.

SAA’s failings do impact severely on frequent travellers. Deciding where to fly and the frequency of those flights are day to day commercial decisions that ultimately determine SAA’s success. As a business traveller attempting to transverse the continent’s high growth destinations conveniently and wherever possible at minimum cost, I hope, as do many I’m sure, that SAA will finally grasp the opportunity presented by this very public crisis, to change their business. The first changes I would suggest are: stop operating SAA and Mango flights on the same routes; establish Mango as a truly separate entity, forcing it to survive or die as a real budget airline; switch more than 80% of SAA’s fleet to servicing regional and international destinations; and ultimately establish reliable daily flights to Africa’s mega cities. SAA has the aircraft – the question now is, does it have the capacity to serve Africa?

See you in departures.

Ewan Cameron – CEO: Lonrho Hotels