Monday, 10 February 2014

Regulations stifle airline growth, says fastjet CEO

FASTJET CEO Ed Winters has called on the government to do more to create a level playing field for airlines to operate in South Africa. He said Africa should be looking at ways to deregulate the market, as happened in Europe, as the current regulatory impediments and bureaucracy were hampering the growth of the industry.
"In the ’80s and ’90s Europe used to have loads of loss-making state airlines, guzzling money from the taxpayer and distorting the marketplace. Now they have a thriving, healthy and competitive aviation industry." The company has said that regional routes from South Africa to sub-Saharan destinations lack effective competition and are underserviced and overpriced. "The level of protectionism that we see is incredible, not just in South Africa, but throughout sub-Saharan Africa. Almost every country is protectionist and so keen to continue subsiding their loss-making state airlines."
Mr Winters said South African Airways (SAA) was overstaffed compared to international benchmarks. "Not by small numbers but by a factor of four or five. It is a huge employer."Speaking at SAA’s recent results presentation Public Enterprises Minister Malusi Gigaba said that the airline would not consider retrenching staff as part of the long-term plan to return the ailing state airline back to profitability. SAA employs 11,500 staff.
Mr Winters said fastjet remained interested in setting up a South African operation. "We want to form a company in South Africa to operate out of Johannesburg." This would be done in compliance with all local regulations, especially the local ownership rules which require a domestic airline to be 75% owned by local individuals or entities before it can operate scheduled domestic flights. He said the company was watching with interest the court case between Comair and Safair over the local ownership rules and whether this would set new precedents around regulation.
In terms of the low-cost airline’s new route from Dar es Salaam to Lusaka, launched at the beginning of the month, Mr Winters said it was already performing above expectations. The route was proving to be extremely popular, especially for traders, as it cut down a 24-road trip to a two-hour flight. Its Tanzanian operations had one of their best months in December.
Source: BDLive

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