A new draft proposal by the Ministry of Transport (DOT) could limit foreign airlines to operate suspended flights between domestic points, which could affect tourism and raise airfares, experts say.
In a comprehensive draft of civil aviation policy released on May 23, DOT said: “The right to suspend can have a negative impact on the South African domestic market where passengers that South African airlines can carry between domestic points are lost to foreign airlines through the exercise of these rights.”
A step back
However, aviation economist and certified public accountant Joachim Vermoten said the department's assumptions are flawed and warned that implementing such a policy would worsen passenger experience and increase travel costs.
“For passengers currently using these flights, it means higher airfares, those that are charged by foreign airlines and those charged by domestic airlines, and also lead to longer journeys from the source market.
He said the proposal violates the International Civil Aviation Organization's standards that prioritized the passenger experience and required member states to travel as short as possible, affordable and convenient.
“Direct flights must operate through additional unnecessary transport points, which means travel is longer, users are exposed to additional risk of delays and prices rise,” Vermoten said.
“In addition, the proposed policy measures will increase barriers to entry, limit tourism to South Africa and reduce traffic through South African airports.”
BMA lamentes cabotage
The DOT also claimed that international passengers on stopovers at South Africa's domestic sites presented processing challenges to the Border Management Agency (BMA).
But Vermooten said this was wrong too.
“BMA concerns and immigration issues only arise when there is a mix of incoming international passengers, flying from the first entry point (if they don't disembark) to the second entry point (where they disembark and pass customs clearance).
However, he explained that the right to traffic under discussion does not correspond to Cabotage as Cabotage was already expressly prohibited under the existing bilateral air service agreement when foreign airlines were carrying domestic passengers within the country.
Would you like to withdraw the bilateral?
Another section of the draft policy states that “the suspension rights already granted in bilateral aviation services arrangements must be revoked.”
Vermooten explained that if the rights assigned by the bilateral aviation service arrangement are unilaterally withdrawn, South Africa will be exposed to the risk of international arbitration by the ICAO.
“The bilateral aviation services arrangement is subject to contracts by two states. If South Africa attempts to withdraw these rights, it will result in international arbitration by the ICAO, increasing barriers to entry and tourism, and a serious reversal of the international trends promoted by the ICAO.
Close the sky
The policy further provides that South Africa will not negotiate open seeds contracts with non-African countries.
“Instead of restrictions imposed by regulatory authorities, the open ski agreement forwards commercial decisions on capacity range, flight frequency and pricing to the airline (worthy of competition monitoring), which means more responsibility regarding the management of the airline to achieve reasonable returns and sustainability,” Vermooten said.
In general, open sky contracts benefit tourism, airports and airport international connectivity, but Vermooten warned that if capacity restrictions are in place, they will not limit supply, raise prices and ensure profitability for airlines that need protection.
“The proposal is regressive and not for the development of tourism, international connectivity or traffic through South African airports,” Vermooten said.
