Air Transport and Aviation Ground-Handling Services in South Africa 2022

Introduction

The passenger and cargo air transport industry has been brought to the brink of collapse during the pandemic.

Its recovery has been hampered by high ticket prices due to the collapse of airlines, which reduced capacity, and soaring fuel prices. With the failure of Comair, SAA and SA Express and the grounding of low-cost airlines, the air transport landscape has changed significantly. The industry faces consumer demand supressed by high inflation, low economic growth and poor business confidence. FlySafair, Airlink and CemAir strengthened their positions in 2022. Air cargo airlines have recovered more quickly than passenger airlines, private business jet airlines have grown and the private charter industry has been resilient.

Opportunities

Greater use of drones in commercial applications.

Implementation of the Single African Air Transport Market initiative of the African Union may liberalise continental air transport markets, reduce ticket prices and increase air connectivity in Africa. Opportunities for local airlines and ground-handling services providers to extend their reach into other African countries.

Outlook

The air transport industry is attempting to recover from the pandemic with reduced capacity and rising costs in a context of fragile demand.

The collapse of SAA, SA Express, Mango and Comair have created a gap, and airlines that have been able to manage costs and access capital to expand capacity have begun to do so. FlySafair, Airlink and CemAir strengthened their position while Lift Airline launched during the pandemic. The return of SAA as a smaller airline will facilitate the recovery of domestic, regional and international routes. Air cargo operations, general aviation and drones are areas of opportunity and growth. Air cargo growth is reliant on economic and trade growth. Airport and air navigation infrastructure development was dealt a blow by the pandemic and expansion is dictated by budgets.

Report Coverage

This report is on the air transport industry and aviation ground-handling services in South Africa. It includes comprehensive information on the size and state of the sector, flight, passenger and cargo volumes, the performance and state of notable players, corporate actions and developments. There are profiles of 44 companies including state-owned SAA and Air Traffic and Navigation Services, international airlines such as Qantas and Singapore Airlines, African airlines such as Ethiopian Airlines, ground handling companies including NAS Colossal Aviation Services and Swissport South Africa and cargo-handling companies such as Menzies Aviation and Bidair Cargo. Strengths

Air Traffic and Navigation Services has jurisdiction over 10% of the world’s air space and so plays a key role in the global aviation sector.

South Africa has a strong air charter and aircraft leasing industry, with growing business jet charter markets. South Africa has an established air transport industry, which has a sound safety record and is well-regulated. South African flight schools are highly regarded and attract cadet pilots from all over the world. South Africa’s domestic and regional air connectivity is the highest in Africa through its extensive airport network and domestic capacity to service Southern Africa through scheduled flights, charter flights and air shuttle services. The aviation industry is an economy multiplier, supporting tourism, trade, commerce and industry and generating jobs across the value chain. The country’s major airports are of a high standard.

Threats

Climate change and the increasing severity and frequency of extreme weather events.

Domestic political instability leading to further unrest. International COVID-19 related travel restrictions continue to plague the recovery of the air transport industry. Poor economic growth domestically and regionally dampening passenger and air cargo transport recovery and growth. Rapidly rising airport charges as ACSA-owned airports seek to recover from revenue losses and capital expenditure postponements experienced during COVID-19. Soaring jet fuel prices due to global shocks.

Weaknesses

High operating costs. South Africa is a long-haul destination, placing the air transport industry at a cost disadvantage. The inability to attract and retain highly skilled staff, especially pilots. There is a shortage of professionals with the requisite expertise and experience. There is a low level of transformation of licensed aviation personnel such as pilots and maintenance engineers.