BUSINESS NEWS - Confusing and costly Covid-19 regulations are costing private airlines their future in South Africa, says the Board of Airline Representatives of South African (Barsa).
Rules on countries blocked from travelling to South Africa and pre-travel testing procedures were proving costly and lacked uniformity between different port health officials at each airport, it said.
As local national carrier SAA prepares to benefit from a R10.5 billion bailout allocation, despite being under business rescue, the rest of the local airline sector was asking for pro-business interventions as seen initiated by governments the world over.
Barsa chairperson Carla da Silva said the group had witnessed many governments around the world aiding their national carriers and air travel value chain, while reviewing cost structures to assist the aviation industry. Airlines are now re-engineering their businesses, downsizing, retrenching and closing offices and routes in order to survive.
“Airlines have entered into business rescue schemes, others have taken Chapter 11 or 12 and some closed. In South Africa our local airlines have also suffered and our local national carrier, SAA, is still in business rescue,” she said.
“This is precisely why it was critical to open up borders. We understand the phased approach and the cautious approach taken by the government. Saving lives is critical but also very important is to save livelihoods in a sector that is highly regulated and will assist the South African economy, considering this sector contributes significantly to South Africa’s GDP.”
Earlier this week the Barsa board gave a presentation to Parliament outlining future prospects for the industry and pertinent issues which require government intervention.
Among these are the list of permitted countries to enter SA in terms of leisure and business and the red list countries from where only business travel is allowed. These measures have substantially impacted revenue and load factors.
The other challenge facing airlines is the turnaround times concerning approvals for business travel from red list countries. Airlines have appealed to South African entities in the value chain, such as Airports Company South Africa (ACSA), to review their cost structures and regulations to assist airlines with their costs and revive the industry, which as Da Silva pointed out, has experienced revenue losses as never before.
Barsa CEO Zuks Ramasia says there are many inconsistencies from port health officials at all airports due to the absence of any published regulations or directives.
“There are memos and media statements that are recognised and implemented by some port health officials and refused by others. Case-in-point, passengers in the event of quarantine enforcement cannot be pushed back onto the airline to manage. Airlines are trying to recover from Covid-19. Should a passenger be found to test negative it cannot shoulder that burden.”
She also listed other operational issues at airports such as documents (PCR and health questionnaires) being removed from passengers while exiting through the door, resulting in passengers not having their documents which they had to produce again to during the terminal screening process and transiting to domestic flights.
“We also need clarity on the process for transit passengers and the requirements for PCR testing, what is allowed and not. The PCR requirement for departing transit passengers is determined by the requirements of the destination country,” says Ramasia.
“Note that if a regional flight is connecting to an international flight or vice versa and port health takes the certificate from the flyers it will cause problems for them at the final destination (where PCR certificates are required).”
Meanwhile, the Department of Trade and Industry welcomed the government’s R10.5 billion bailout of SAA, which according to its statement on Thursday, will aid in the business rescue plan and work towards the formation of a new airline.
Slamming critics in the DA and elsewhere for their criticism of the budget announcement, Trade and Industry Minister Ebrahim Patel says among the plans for the allocation are the restructuring of the entity. The last allocation of R2.8 billion earlier this year went to paying off of mounting credit debt at a cost of R2.2 billion and retrenchment costs of the same amount. It also includes provision for unused tickets to the value of R3 billion.