in Air Transport

AFRAA: South African strategy due in December - but is merger an option?

Posted 20 November 2012 · Add Comment

South Africa's minister of Public Enterprise, Malusi Gigaba says South African Airways will deliver its strategy paper to him on December 15th.

Speaking at the Sanditon Convention Centre in Johannesburg on the sidelines of the AFRAA annual assembly, where he was the VIP guest, he said the airline was consulting various government departments to formulate the strategy to take the airline forward following the departure of the former management board.

Regional cooperation with other airlines could be a key element of the plan – or it would be if Kenya Airlines CEO Titus Naikuni had anything to do with it.

Speaking at the conference Naikuni said “People here think of airlines like Kenya, South African and Ethiopian as big carriers. We are not we are small. Perhaps we should be talking to merge to create a single African carrier.”    The suggestion caused Zemedeneh Negatu, the managing partner of Ernst & Young in East Africa to later show a chart demonstrating that if the three carriers did come together they would still only be half the size of Emirates.                                                                                                                                     Pictured: Minister Gibaba    

Naikuni (pictured left)  said “The lions are outside and they are roaring at the gates of Africa,”

He said that even without merger, African airlines were struggling to work together. “Our skies are not open. We have capacity but we can’t access the market. We just give the rights away to non-African airlines.”

Minister Gibaba said: “The working environment in South Africa is robust for the aviation sector.  South African skies are liberalised, and the support that government has given the private airlines in terms of legislation and policy has been adequate.”

Ethiopian Airlines CEO Tewolde Mariam said that there was a role for the African Union to play. “This is older that the European Union but we are lagging behind. We don’t have a regional regulatory freemwork everything is done on a bilateral basis. That is why 80% of the market is with non African airlines.”

Like South African chairman and acting CEO Vuyisile Kona, Tewolde shrugged off the merger suggestions, but conceded, “something has to be done.”

According to Gigaba, there are clear priorities for SAA including increasing route networks, specifically the growing market destinations for aviation such as India, China and South America and aligning policy with the relevant government bodies for issues such as visas, tourism and transport .

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