Air Transport and Air Ground Handling Services in South Africa 2020

Air Transport and Air Ground Handling Services

The air transport industry is a major contributor to the South African economy as it facilitates the movement of passengers and cargo to, from and within the country. Air transport and foreign tourists travelling by air contribute 3.2% of GDP. Local industry developments are dominated by the business rescue of national carrier South African Airways (SAA) and the liquidity crisis of its subsidiary SA Express. SAA, SA Express and SAA Technical are included in the commission of inquiry into state capture, corruption and fraud in the public sector. Travel restrictions, airport closures and flight cancellations following the global outbreak of the coronavirus are reducing global air passenger and cargo volumes.

Multiple Headwinds

The sector continues to be affected by the economy, the highly competitive domestic airline environment and operational and sustainability challenges. Stringent visa requirements and the relatively limited number of air services agreements hinder the country’s ability to attract international travel. Aviation continues to be affected by capacity constraints due to the delay in the rollout of airport expansion projects. Airports, ground handling and support services are experiencing high operational cost increases including security. SAA, which employs more than 5,000 people and has a fleet of more than 50 aircraft, is in business rescue and has cancelled numerous flights. Its losses total R28bn over the past 13 years and it has not presented government with a financial report since the 2017 financial year. Government has spent R16.5bn in bailouts over the past ten years and is to repay SAA’s outstanding government guaranteed debt of R9.2bn over the next three years.

Report Coverage

This report focuses on the air transport industry, including passenger and cargo services, and airport ground handling services including operation of airports, flying fields and air navigation facilities, and excluding manufacturing. It includes information on the state and size of the industry and factors that influence it. This includes trends in flight and passenger movements, corporate actions in South Africa and on the continent, and regulation and competition issues. There are profiles of 40 companies in the sector including the beleaguered SAA, airlines such as Comair, Mango and Safair, and service operators such as BidAir and Swissport.