Why don’t we fly around this country in small planes that carry, say, five to twenty-five passengers – and in the same way, and to the same extent that they do in places like Botswana or Kenya? Is the legislative environment the stumbling block? Or don’t we have enough airports? Or have we more sinister factors at play?
This article appeared first in the TBCSA’s digimag, Tourism Business Africa, which is available here.
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Flights or facilities: what’s holding the domestic airlift down?
Martin Hatchuel
Mossel Bay Airport
Calls for deregulation, the liberalisation of Africa’s skies, the sale of the national carrier, and better integration of South Africa’s transport infrastructure peppered the conversation both at October’s annual general meeting of the Airlines Association of Southern Africa (AASA), and at the South African Travel and Tourism Industry Summit, where top-level delegates examined the theme of “The Value of the Traveller.”
And these things may be very well for the big airlines and the major local destinations – but are regulation and policy really the things that are keeping us from developing airlift to our provincial towns, and from opening the far-flung destinations that hold some of South Africa’s greatest but least-used tourism attractions?
Certainly the need is there: talk to the tourism authorities and the companies that run the lodges and they’ll speak with passion about the potential they represent. The people who operate the smaller aircraft would love to see more passengers taking to the skies, the accommodation providers would love to sell more beds, and the attractions would love to fill more seats – all of which works well with South African Tourism’s new ‘Nothing’s More Fun than a Sho’t Left’ campaign, which aims to get more South Africans exploring our beloved Mzansi more often than ever before.
But…
“An increased airlift would definitely boost domestic tourism,” said Northern Cape Tourism Authority CEO Sharron Lewis, who pointed out that while the Province is presently served by only a limited number of relatively expensive flights, it offers almost unlimited opportunities for both leisure and business travel.
Which is why the Northern Cape is probably an excellent place to begin a discussion about the domestic airlift. It’s vast and intriguing – both from a tourism perspective and from a business (read ‘scientific’) point of view.
“We’ve positioned ourselves as the Province of Extremes,” said Ms. Lewis. “Extreme culture, extreme nature, extreme adventure sport.”
And extreme distances, too: if Ms. Lewis or her Kimberly-based team need to attend a meeting in, say, Springbok, “We have to drive there, and we’re out of the office for two days at least.”
The region that’s attracted the world skate boarding championships, the world barefoot waterskiing championships, and the Bloodhound SSC Project – the car that’ll attempt to beat the land speed record, and, later, to reach Mach 1.4 (1,610 kilometres an hour) – is also the home of the Kgalagadi Transfrontier Park, and the Augrabies Falls National Park. And it’s the site of the country’s first Solar Park – a 5 gigawatt installation that’ll create over 15,000 jobs, and which’ll deliver nearly ten times more energy than Spain’s Olmedilla Park (presently the world’s biggest photovoltaic collector, although it generates a mere 60 megawatts of power – on a sunny day).
And then there are the MeerKAT and the SKA projects near Carnarvon: the MeerKAT Array (which is currently under construction), and the awe-inspiring Square Kilometre Array, which will go into construction in 2016, and which will be the world’s biggest telescope when it’s done. (According to the SKA site: “at least 50 times more powerful and 10,000 times faster than any other radio telescope”).
So you’d think that the airlines would be falling over themselves to serve the region.
“But we have limited capacity to the Northern Cape,” said Ms. Lewis. “We also have problems with the time slots linking to international flights coming into and out of OR Tambo, and we don’t have flights to Cape Town every day.”
And then there’s the price of the tickets: “I’ll be flying from Cape Town to Windhoek this week, and my ticket cost me about R 2,700.00 – but if I was to fly from Cape Town to Kimberly, it would be almost twice as much,” said Ms. Lewis.
Glynn O’Leary, of Transfrontier Parks Destinations, which manages and markets community-owned tourism facilities in the Kgalagadi Transfrontier Park, the Great Limpopo Transfrontier Park, and the Drakensberg Conservation Area, amongst others, agreed that airfares are too high – in fact he called them “astronomical, particularly on routes like Upington and Phalaborwa.”
But, he said, it’s quite easy to build a case for increasing the airlift to many of the smaller destinations.
Take a hub like Phalaborwa, which offers direct access to the northern parts of the Kruger National Park, and, regionally, to the Mozambican beach resorts – and which would benefit economically if it could attract more traffic. Mr. O’Leary cites the example of Nelspruit: “Access by air has been important to how it’s grown as a city.”
Increased frequency and more affordable flights to Phalaborwa, he said, would open massive opportunities for whole areas of the Kruger Park, and for the surrounding region.
“The beds in the Kruger National Park are concentrated in the south, and some would argue that that’s because that’s where the game is concentrated.
“But in fact the game occurs throughout the Park, and even right up in the north-west corner we’ve seen huge herds of buffalo and elephant.”
Mr. O’Leary argued that tourist beds have become concentrated in the South because that’s the part of the Kruger that’s most accessible. “You can drive to Nelspruit from Jo’burg in about three hours, and half an hour later you’re in the Park – but if you want to go the North, you have a six hour drive just to get to Phalaborwa, and then you still have to travel further to get to the camps.
“This is where the airlift becomes important.”
So what’s keeping South Africa’s famously bold entrepreneurs from flying us all from place to place?
According to Chris Zweigenthal, CEO of the AASA, “Anybody, if they can prove to the licensing authorities that they can perform a safe and reliable operation, can probably get a domestic license.”
And it’s not a question of infrastructure, either: the country is well supplied with airfields large and small. Upington, for example, has the longest runway in the southern hemisphere (at 4,900 metres it’s big enough to land a Space Shuttle), while the 1,373 metre runway at SA Airlink’s Phalaborwa Airport can accommodate planes licensed for up to 29 passengers – and there are excellent facilities at places like Mossel Bay (which has a 1,100 metre runway that’s owned by the municipality and managed by the local aero club) and Beaufort West (a privatised airport with a 1,250 metre runway).
Rather, it’s a question of the practicalities of the way people move from place to place.
“You need a network,” said Mr. Zweigenthal. “You can’t just have one leg on a service: you need to feed through to the international connections.” Which means access to OR Tambo and, to an increasingly lesser extent, to Cape Town International Airport.
And then there are the economic problems.
Both the fuel companies and ACSA – the Airports Company of South Africa, which operates those all-important major hubs, without which short-haul services can’t be made to work – now require every start-up that wants to enter the playing field to lodge massive guarantees (and they’re said to be trying to get the existing players to do the same, too), which raises the barrier to entry considerably.
“ACSA and the fuel companies have had their fingers burned in the past, and now they’re making decisions which are probably not very popular – although we’re trying to take this up with them on behalf of our members,” said Mr. Zweigenthal.
“We’re saying to them, ‘Guys, you need to assess the risk, and to take a risk-based approach’ to each individual operator.”
But even without the challenge of tying up large amounts of capital before your first passengers board your aircraft, there’s another, almost greater challenge: scheduling.
In order to make a route work, especially in the corporate travel market, you have to fly at times that suit the traveller – but congestion at places like OR Tambo and Cape Town International has become acute. The prime slots have all been taken up – and these days, the prime slots are more and more concentrated at OR Tambo.
“We haven’t spent much time on the domestic airlift because we’re concentrating on getting internationals into the region,” said Western Cape MEC for Finance, Economic Development and Tourism, Alan Winde.
And he has to do this, he said, because “Cape Town is losing out because of SAA’s central hub strategy – which pulls everything into Johannesburg – and this has a huge impact on business travel.”
Commercial manager at Federal Airlines, Brad Dickson, said that the larger players have managed over the years to tie up all the prime arrival and departure slots.
“The best slots are inaccessible to any new entrant,” he said, “So you have a problem if you want to have anything remotely to do with corporate travel – you have to fly at 5:30 in the morning, or wait until 10:30 or 11:00.” And the market don’t like them hours.
Asked if Lanseria wasn’t an option for the Gauteng area at least, Mr. Dickson said that it isn’t as accessible: the Gautrain has made OR Tambo a more attractive facility.
“It’s a very convenient service from Pretoria, Johannesburg and Sandton.”
And finally there’s the question of competition: as Mr. Dickson said, it doesn’t always pay to be a pioneer.
“We operated to Vilanculos for long time. We started the route with Cessna Caravans (which typically seat nine passengers) and over a period of about ten years steadily grew it to a point where we were operating ATR 72s (twin-engined turboprop aircraft that seat 78).
“So if you have the time and the space, you can develop the smaller routes – but if you do it too successfully, the other, established carriers want in on them, and they’re able to offer things like frequent flier programmes and pricing arrangements with international airlines, which, from a value proposition point of view, make sense for the passenger.
“That’s exactly what happened to us: LAM (Mozambique Airlines) saw that we were operating profitably, so they brought along a Q400 (a 90-seater turboprop) – which was obviously state subsidised – and they lowered the prices.
“We fought on for another three years, but eventually we had to get off the route.”
Now, he said, the company confines itself to a very specific market: “We operate in charter, and we operate shuttle flights to game lodges – essentially a ring-fenced segment that the larger operators aren’t willing to take on because it’s highly specialised.”
And, perhaps, because South African destinations like Kgalagadi and Kruger have relatively few high-end beds compared to the kind of self-catering beds that Glynn O’Leary calls “SANParks-type accommodation.”
Which brings us to the fundamental question of the demographics of the traveller.
In the leisure segment, “South Africa seems to have two markets,” said Mr. O’Leary. “The very wealthy, who are happy to pay a fortune to be moved, and the people who are looking at lower cost destinations.” So while guests in places like Botswana or Kenya regularly fly around in small aircraft operated by short-haul carriers, the bulk of South Africa’s visitors “are looking for good deals, and I would imagine charter-type prices are too high” – which means that if they can’t use the low-cost carriers, they drive, or they join an escorted tour.
And the business travel market is relatively small, too.
“We have a radically different problem (to countries like England, where air travel between smaller destination has grown quickly and steadily),” said Brad Dickson.
“Although we have 50 million people in South Africa, realistically maybe two to three million of them are travellers – for the rest of our population, unfortunately, it’s a straight economic thing.”
… Which the SANTACO experiment proved. SANTACO – the South African National Taxi Council – wanted to establish Santaco Express as an alternate to the country’s ubiquitous minibus taxis to carry passengers from the major hubs to destinations like Umtata and Bisho.
“You’ve got to get to the market, but you’ve also got to charge realistic prices,” said Mr. Zweigenthal. “I think they [Santaco Express] pitched it at such a competitive price that it wasn’t sustainable.”
So what’s a country like ours to do?
It seems there’s no short answer – although many people and organisations are rightly concerned about the question, since opening up smaller destinations will open opportunities as much for the destinations themselves as for the tourism industry as a whole.
“The opportunities do exist,” said Mr. Zweigenthal, “but you need to get to the market – and maybe that’s where the tourism authorities can help unlock the people potential that’s sitting there.”
Which is what at least some of those authorities would like to do.
“The exclusion that’s created by the bigger players’ competitive practices worries me,” said MEC Winde. “We’ve seen so many airlines come into the local market and then not make it, and maybe this is where regulation and ‘Big Brother’ have a role to play.”
Tourism’s on the rise: the latest Tourism Business Index – a quarterly report compiled by Grant Thornton on behalf of the Tourism Business Council of South Africa and First National Bank – shows that the industry is more confident than it’s been in a long while. According to the survey, 32% of respondents in the accommodation sector put improved performances in Q3 of 2013 down to strong domestic business demand, while 45% of respondents in other sectors believe the weak exchange rate is the reason why things are looking up.
But either way, perhaps now’s the time to leverage this industry’s growing strength, and perhaps it’s the perfect industry to push for the formation of a facilitating body that has the power to demand answers to uncomfortable questions (like: are ACSA and the fuel companies contravening the Competition Act by requiring the deposits and guarantees they’re said to be asking?), and that has the strategic planning ability to find solutions that could help achieve the integrated transport system the country so desperately needs (like: extend the reach of the Gautrain to create a seamless link between international arrivals and departures at OR Tambo, and a new set of domestic connections at Lanseria).
After all – this is tourism. We’re in the business of putting people together.