Thursday, 1 August 2013

South Africa's crash landing

Full article in JPG format: page 68/69 & page 70

Constant bickering between incumbent and future operators in South Africa underscores how its aviation sector – though by far the most developed on the continent – remains beset by problems. Ten of the 11 independent airlines created since market deregulation in 1991 have collapsed, most recently including 1time and Velvet Sky.

The tense atmosphere has begun spilling over into the country's courts. Private operator Comair is now challenging the 5 billion rand ($490 million) government guarantee afforded to flag carrier South African Airways (SAA). "We just have to wait for a court date," chief executive Erik Venter says when asked about his next move. He believes that state support enables SAA to under-cut fair market ticket prices, driving private carriers out of business...