THE RECOVERY of the southern African airline industry has been marked by striking successes and equally striking failures.
The mix of winners and losers made it difficult to gauge the overall mood of the industry at the Airlines Association of Southern Africa (AASA) Annual General Assembly outside Cape Town.
Making up for the two-year hiatus caused by Covid, this year’s AASA annual assembly was very well attended. Over 260 delegates pitched up for the annual catch-up.
With the loss of over 50% of South Africa’s low-cost carrier seat supply, there has been a windfall in loads and thus yields for the surviving carriers. Their presumed profitability has attracted the attention of South Africa’s Competition Commission.
However, the strong demand experienced by some carriers was offset by acknowledgement of the difficulties other AASA member airlines are having with the post-Covid recovery.
As a whole, the African airline industry has been slow to recover from the pandemic and is still operating at around 80% of pre Covid levels. This is evidenced by figures that show Africa’s share of the world airline market has fallen from around 2.2% of global traffic to just 1.8%.
FlySafair, Airlink and Cemair are fast growing into the space left by the collapse of Comair’s kulula and BA brands and the earlier closure of low cost carrier Mango and SAX. FlySafair CEO Elmar Conradie said, “Our industry emerges from the Covid-19 pandemic in a very different shape to what it was. It is leaner, fitter and stronger, but faces considerable economic and regulatory headwinds and external threats, including the reliable supply of fuel, which is the most immediate pressing issue.”
‘the fast bounce back by some airlines’
The strong recovery by FlySafair, Airlink and Cemair has given them the opportunity to rapidly enlarge their pre-pandemic fleet. This has been made possible by the depressed prices of many jets, especially the narrowbodies, and the excess of seat demand over supply.
Regional airline CEOs reported a mixed view of recovery prospects. Joao Carlos Po Jorge, the Director-General of Linhas Aéreas de Moçambique (LAM) was cautiously optimistic about his small airline’s chances of being able to grow its niche in the competitive southern African market.
Despite the fast bounce back by some airlines, the consensus was that confidence for the year ahead is clouded by economic ‘challenges’ such as inflation, rising interest rates and energy costs, as well as currency devaluation against the very strong dollar.
A common sentiment was that while these are all concerns, traffic is strong and fares are high, so the airlines are bouncing back strongly. The resilient airlines will adapt to changing circumstances.
AASA CEO Aaron Munetsi said, “Key issues addressed included the need for urgent action by governments in the region to review policies and regulations to enable a more efficient, comprehensive and competitive air transport industry to serve and support all of the economies of the SADC region.” So there you have it.
