The International Air Transport Association (IATA) has expressed great concern that the Airports Company of South Africa (ACSA) has proposed a "ridiculous 129% increase in its charges for the period 2010-2015.
But what is of even more concern to Giovanni Bisignani, IATAs Director General and CEO, is the fact the South African regulator has done nothing to stop this, and has tacitly condoned the increase. Referring to the regulator as a "phantom regulator", Bisignani urged a review of South Africa's economic regulation of air transport infrastructure.
This emerged during a press conference held in Johannesburg last month which was addressed by Bisignani during what will probably be his last visit to the country prior to his retirement from the position in the near future.
During his critism of ACSA and its fee structure, Bisignani said the cost of the country's airport infrastructure was of major concern."The South African economic regulatory process is not effective. When you operate monopoly, you have no competition, so you need a regulator. That regulator needs to be respected. But the regulator is not effective," he added: "There's no comparable situation in the world like this. ACSA will be adding $1, 2-billion to airlines costs. Its big burden for the airlines."
ACSA was not the only parastatal to be lashed by Bisignanis tongue; he also slammed the Air Traffic and Air Navigation Services (ATNS) for its 71% hike in charges during the same period.
"South Africa has developed a good infrastructure, but it is part of a value chain that needs to be cost efficient to be competitive. Allowing increases of 129% and 71% completely misses the mark .Johannesburg, the country's main gateway, now ranks among the most expensive airports of its size in the world .Airlines are being made to foot the bill for poor performance and an airport in Durban that we did not need. This is no way to build a more successful tourism industry. We need some joined-up policy thinking," said Bisignani.
IATA fired a broadside at the proposed inclusion of aviation in South Africa's carbon tax scheme. "Aviation is committed to the most aggressive climate change targets of any global industry: to improve fuel efficiency by 1, 5% annually to 2020, to cap net emissions from 2020 with carbon-neutral growth, and to cut emissions in half," he said.
"Air transport is also the only global sector where governments have an agreement on emissions management .This was achieved in 2010 through ICAO in line with the Kyoto protocol.
"South Africa is absolutely correct in strongly opposing Europe's plans to include aviation in its emissions trading scheme from next year. It is illegal and it will introduce strong market distortions, particularly for long-haul destinations. So it is difficult to understand why South Africa is now considering inclusion of aviation in its own unilateral carbon tax scheme. This must be stopped.
"As host of COP 17 later this year, South Africa must show leadership to achieve a global approach on mitigating climate change. Taxing aviation is a step in the wrong direction for an industry that was commended by United Nations Secretary General, Ban Ki-moon, as a role model," said Bisignani.
On another issue, IATAs CEO praised South Africa for its strategic focus on tourism as akey driver in the nation's new growth plan. He urged the government to use joined-up policy thinking and take key measures to bolster its air transport sector to achieve the 235 000 new tourism jobs that the government was targeting by 2020.
"Great Tourism Nation"
"South Africa has all the building blocks to be a great tourism nation. But this will not happen by chance. Joined-up policy thinking is needed to support it with competitive and a safety record across Africa that is world standard. These are tough challenges, but with joined-up policy thinking, great results are possible," said Bisignani.
Bisignani noted that IATAs simplifying the business programme was playing a key role. A world economic forum index on competitiveness had said that the complexity of South Africa's import/export procedures could be a bottleneck to trade. The introduction of electronic shipping and customs documentation through IATA e-freight would help speed the process.
Johannesburg went live with e-freight from November 2010 and Cape Town began e-freight shipments in March this year. In total, the programme is designed to save $4,9-billion annually across the global air cargo supply chain.
In closing, Bisignani pointed out that African air safety remained an issue with a 2010 accident rate that was 12-times the global average."Aviation must be safe everywhere. Africa cannot be the exception.
"The IATA operational safety audit (IOSA) is a condition of IATA membership and is making a difference .The 22 sub-Saharan African carriers on the registry outperformed the rest of the industry .I urge South Africa to take a leadership role in the region and promote IOSA as a tool for government to use to supplement their safety oversight and improve the regions performance .For aviation to deliver its enormous economic benefits, the first priority is safety," said Bisignani.
Bisignani was visiting South Africa as part of the recent World Economic Forum Africa.