The Airlines Association of Southern Africa (AASA) has forecast that airlines in the Southern African Development Community (SADC) region will suffer total losses of $300-million for this year. This would be in sharp contrast to the expected total profit of $33.8-billion for the global airline sector. However, the performance of the various individual airlines in the region would not be uniform. Regional demand for air transport was predicted to be only 2% to 3% a year over the next five years, because of weak gross domestic product growth in most SADC member countries.
These forecasts were reported by the AASA on Friday, from Livingstone in Zambia, where it has been holding its 48th annual general meeting. The causes for the expected poor performance of the sector in SADC was attributed to rising costs, market turbulence and political uncertainty at the local, regional and world levels, which were adversely affecting trade, tourism and economic development.
“Tourism, along with trade, is a powerful lever of growth. But they are being stunted by uncertainties,” highlighted AASA CEO Chris Zweigenthal. “As one of the most capital-intensive sectors and a vital enabler of economic activity, the airline industry needs Southern African governments to clarify their local economic reform policies so they do not spoil the appetite for much needed trade and investment in the region.”
“For the aviation industry to expand and fulfil its potential in supporting jobs and enabling economies to become stronger, passenger growth must return to levels greater than five percent,” he stressed. “To accommodate the volumes, we will need to operate more flights. This will require appropriate investments in modern aircraft, in airports and in airspace management infrastructure and systems.”
But there are also more immediate problems that would have to be overcome, some of them caused by governments in the region. These included Angola, Mozambique and Zimbabwe forbidding airlines to repatriate their revenues. Another issue was the lack of personal data protection and cybersecurity laws in most countries of the region. Complicating matters, the few such laws that had been passed in SADC were inconsistent with each other. And SADC airlines, if they marketed or sold services and products in European Union (EU) countries had now also to comply with the EU’s General Data Protection Regulations.
As for SADC airlines themselves, they had to be competitive, provide first class customer service, deliver value-for-money for travellers, traders and tourists, and be highly efficient. It was essential for the complete air travel value chain to work together, to ensure safety and security (both physical and cyber), encourage the creation of welcoming immigration and visa regimes, control costs, and reduce the sector’s impact on the climate.