WATCH: Uncontrolled SAA exit would hurt economic growth, regional airlines association says
JOHANNESBURG -An uncontrolled exit of South African national carrier SAA from the air transport industry would result in slowed or even negative economic growth if no contingency measures could be implemented the Airlines Association of Southern Africa (AASA) has said.
South African Airways announced on Friday that its board of directors had - after consultations with the shareholder the government - resolved to place the company into business rescue in an effort to find a solution to its financial challenges.
The move should provide some security and clarity for South Africa’s air transport, trade, logistics, travel and tourism sectors, the AASA - whose members include all of the domestic airlines in the country and most airlines in the Southern African Development Communit region and the Indian Ocean islands - said in reaction to the news.
Video by: Chelsea Lotz, Business Report TV
"While AASA may not comment on SAA’s business or its shareholder’s decision, it is important to consider them within the industry and broader socio-economic contexts within which the sector subsists," it said, noting that South Africa’s domestic air transport market was one of the most robustly competitive in Africa and benefited the entire economy by providing choice, affordable, safe and reliable connectivity to destinations and markets throughout the country, while reducing the cost of travel and doing business
"It is a situation AASA, its members and crucially, their customers - and presumably also government - would prefer to see maintained," it added, warning:
"The net effect of any uncontrolled SAA exit, against which the air transport and tourism industries are unable to implement contingency plans, would be slowed, or even negative, economic growth, which will compound fiscal shrinkage."
It said the business rescue must provide the aviation and allied industries the ability to adjust, adapt and ensure that their customers, markets and the communities they served were provided with sustainable, competitive, capable, reliable and safe services.