SUMMIT TV: Looking at aviation on the African continent, how has the sector fared given the global economic environment?
INATI NTSHANGA: Iata (the International Air Transport Association) predicts Africa will make zero profits in 2012 and this is an improvement from the 4% loss from before…
STV: This worries you, does it not?
IN: Yes, it worries us because we need to be self-sustaining so that we are not a burden on the economy of the country. There’s a lot of good things about the continent — (passenger) growth in some countries will be around 7% for the year but the challenge, of course, is cost. There are different costs. Fuel is killing the airlines. But also service charges like airport and landing charges. Also, infrastructure — as you know airports in Africa are not at a good level with statistics showing we contribute about 3% of the world’s air traffic but 13% of the accidents so that’s definitely disproportional.
STV: You say Iata has predicted 0% profits, which is an improvement from minus 4% for this year. What are the projections for the year going forward?
IN: The projection is it’s still going to be tight — the airlines are not like other industries where they see profits around 20% — with us 5% is still a very good profit and we will always border on that. It’s about working smart and being innovative to be sustainable. It’s not just about profit there’s also benefits from aviation with Iata saying the sector creates 250-million jobs directly and indirectly and we contribute about R50m to gross domestic product (GDP) so those are the benefits we see.
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