SAA’s ‘unfair advantage’ in focus

The airline industry is in
survival mode and needs
to move beyond that into
an era of sustainability,
said Erik Venter, joint chief
executive officer of Comair.
Speaking at the monthly
Transport Forum in
Woodmead last week,
Venter said in South
Africa specifically it was
important that the playing
field was levelled to give
everyone a fair chance.
Referring to
government’s continuous
bail-out of South African
Airways, Venter said this
affected both passengers and freight. “As private
airlines there is just no way
we can compete with an
entity that operates in an
environment where they are
just given money as and when
it is needed.”
He said it was clear that
sustainability was a major
problem for domestic airlines
taking into account that
73% of the start-up airlines
since deregulation had failed
compared to the state-owned
airlines where there had been
growth. “With the industry
not making a profit at present
it is difficult to attract
investors and just as difficult
to raise funds. Add to that
operation in an arena where
state-owned entities have an
unfair advantage, and we are
facing big challenges.”
He said a practical example
of this was SAA Cargo
offering a 25% discount on
rates for three months.
“No private company
could even consider such
an offer as it would be
unaffordable. It then makes
sense that they were taken to
the Competition Commission
by their competitors.”
Professor Jackie Walters,
head: Department of
Transport and Supply Chain
Management at the University
of Johannesburg, agreed
saying it was important
to protect the principle of
competition.
“The playing field is not
level in the aviation industry,
be it for passengers or cargo.
With the State still competing
with privately owned airlines
in a fully deregulated market,
we have a situation where
Government is the referee and
a player in the market.”