South Africa’s aviation industry is an active enabler of industry in the region, sustaining 70 000 direct jobs in the country and around 1.1 million indirect jobs.
Barsa Chair, Fouad Canhye, noted this in his opening address to the 10th Anniversary Barsa Conference at the Houghton Hotel, Johannesburg, on March 7 and 8.
Thought leaders and key stakeholders in the Southern African aviation industry turned out in numbers. The delegates were drawn from domestic and international airline operators, air transport regulatory authorities, airport operators, aviation service providers, aviation and tourism associations, tourism marketing agencies, government departments and agencies, and research institutions.
The theme of the conference was ‘Moving Forward: Embracing Accountability for a Better Future’.
Macro-economist Daniel Silke, in his presentation on Charting Economic Progress, gave a vivid picture of the global macro-factors in the background against which the airline business currently operates.
“We are still in recovery from the pandemic – it was a deep nadir for the aviation industry,” said Silke. He added that, among the factors were global warming and sustainability, now big issues for airlines. Interest rates have levelled off but inflation is once more creeping up. All this plays out against major tensions caused by the Russia/Ukraine war and the Israel/Hamas conflict (the latter includes the problems off the Yemeni coast on the Red Sea and its effects on jet fuel prices). Added to that are the existing trade tensions between the US and China over Taiwan.
“This is the time for South Africa to tread carefully in its global alignment,” said Silke, observing that if South Africa isolated itself from the West with extreme foreign policies, it could find itself out in the cold.
He said emerging and developing economies expected an average growth of 4.1% for 2024 – India forecasts 6.5% growth, putting it way ahead of South Africa’s 1.3% forecast. India’s growth should bode well for inbound tourism into South Africa, given the subcontinent’s cultural connections to the country. Silke pointed out that in 2022 India’s outbound travel market made 13 million trips. In 2050, 80 million Indians are expected to depart on foreign holidays or business trips. This should add significant weight to India’s inbound market to South Africa.
While China’s GDP growth is expected to slow (international outbound travel by the Chinese is down by one-third on the pre-pandemic figure) Chinese people are slowly starting to travel again post-pandemic.
Africa’s 3.8% GDP growth in 2024 is expected to be better than the rest of the world, but South Africa’s growth falls far short, at 1.3%, which Silke described as “treading water”.
“GDP per capita in South Africa is falling. Eskom will continue to retard growth. All this contributes to our high unemployment rate.”
With aviation and tourism being the job creators they are, it would be reasonable to expect South Africa’s Departments of Transport, Tourism and Home Affairs to put their heads together to stimulate the two industries.
But, currently, according to Silke (quoting Iata), South Africa has the highest cost of running an airline on the globe.
Silke urges the aviation industry to lobby the government for…
- reduced taxes on aviation-related goods and services,
- a subsidy on the provision of Sustainable Alternative Fuels (SAFs),
- reduced market access restrictions, and
- streamlined access to Foreign Operator’s Permits.
Silke added that visa-free access for all African citizens to all African countries should be a given.
