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Aviation History
1992
1992 - 0881.PDF
SAA /lies Airbus A300B4s and Boeing 737-200s on regional and domestic scheduled services South African Airways is struggling to come to terms with greater competition on its domestic and international routes, as sanctions are lifted. Ian Goold reports from fohanneshurg on the flag-carrier's response to the effects of accelerating political change. WINGS OF CHANGE The removai of political sanctions has exposed South African Airways (SAA) to greater intercontinental competition as major carriers re turn to the market while, at home, it faces domestic competition on prime internal routes for the first time. More than 30 years after British prime minister Harold Macmillan warned that a "wind of change" was blowing through the continent, South Africa's air-transport mar ket is opening up. SAA has to learn how to operate success fully as a private enterprise in a deregulated domestic market, yet take advantage of nternational opportunities created by the new political situation. Meanwhile, poorer neighbouring nations, which have already opened their doors to SAA, do not welcome bilateral agreements which have no capacity limitations or ca pacity-sharing. Globalisation of the air-transport industry and the growing importance of alliances between carriers sets the scene for an unfolding drama in which SAA wants to play more than a "bit part". Its commercial prestige compared to other southern African carriers means it could be an attractive partner for global majors wishing to expand into sub-Saharan Africa. As SAA plans for privatisation in the mid-1990s, it is considering its role in continental Africa and how to compete on domestic routes which account for 90% of its 4.7 million annual passengers but just 40% of profits. Chief executive Gert van der Veer is in no doubt how cold the winds of change will be: "There is neither charity, nor, with all due respect, much in the way of business ethics in the global market. The develop ment elsewhere towards deregulation and liberalisation must be viewed in this context and cannot be naively applied to the...South African situation." Nevertheless, he acknowledges that as "part of the global game", SAA must adapt to changing circumstances. Van der Veer points out that SAA has suffered three decades of stifled growth and curtailed competitiveness because of imposed sanc tions. Throughout this period, the airline maintained international links without sub sidy, while having to operate routes circumnavigating Africa. This compulsory (and costly) detour ended in July 1991. • IGHT INTERNATIONAL 1 - 7 April, 1992 33
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