Travel agents appeal against SAA’s cancellation of flights
SAA’S service between Joburg and Buenos Aires, once a particularly popular destination for Capetonians in the days when Malaysia Airlines stopped here, will end at the beginning of next year.
This is bad news for our tourism industry because Cape Town has become an increasingly popular holiday destination for Argentinians.
A group of Argentinian travel agents, appealing against the decision, said last week that tourism from their country to South Africa was worth more than R400 million a year.
Alan Winde, the Western Cape Minister for Finance, Tourism and Economic Development, has asked for an interview with SAA’s new chief executive, Monwabisi Kalawe – whom many of us remember from when he was general manager of Cape Town International Airport – to ask for the service to be retained.
Winde said Argentina was one of our fastest-growing tourism markets and the decision to stop the service before our peak season was a particular blow. It was also a setback to increased trade between the two countries.
Although SAA had not yet issued an announcement to the press about its decision to close the route, the airline’s head of communications, Tlali Tlali, told me that this had been decided because it was making a loss. The matter was debated in Parliament this week, when it was mentioned that the loss was up to R50m a year.
But it appears that SAA’s service between Joburg and Beijing, which the airline wanted to close but the government insists on retaining because of the importance of this country’s ties with China, is losing up to R300m a year.
A major problem for SAA is that it has needed a new fleet of new-generation, fuel-saving widebodied aircraft for some time to compete with other airlines.
It also suffers from the disadvantage that, as a state-owned airline, it has to make uneconomic decisions in line with government policy – as the decision to retain the Beijing route shows.
Incidentally, several business people, particularly in Cape Town, tell me they are continuing to fly to Beijing with Emirates because of the greater comfort and because they enjoy the stopover in the comfortable hotels near the Dubai airport.
Unfortunately, the decision to withdraw from Buenos Aires does not mean that SAA’s existing fleet will be used on more profitable routes – far from it. Instead the aircraft will be used to strengthen SAA’s African route network.
It is, obviously, necessary for SAA to be the leading airline for travel within Africa and there is no time to be lost as foreign airlines, attracted by the increasing prosperity of the continent and the growing demand for business travel to it, are moving in.
But Erik Venter, chief executive of Comair, warns that the exceptionally high costs of using many African airports coupled with the fact that the growing middle classes in much of Africa are not yet earning enough to fly frequently, mean that most African routes are unprofitable at this stage.
SAA’s new code- sharing arrangements with Middle Eastern airline Etihad, plus the similar arrangements it has with partners in the international Star Alliance, will obviously supplement its passenger loads.
But carrying their passengers under these arrangements means that it will receive only a portion of the fare.
In the long term it will almost certainly benefit our national carrier to be the dominant airline in Africa. In the meantime we are lucky that, in most cases, European or other airlines are maintaining routes connecting Cape Town with Europe – still our main source market for tourism – and Asia.
British Airways and Dutch airline KLM, which fly to Cape Town all year round, have already increased the number of flights for the summer.
Singapore Airlines and Turkish Airlines are others that fly here all year round.
German airline Lufthansa, Air France, Virgin Atlantic Airways and Swiss airline Edelweiss are back, offering seasonal flights.
So is tourism airline Condor, based in Frankfurt – which some Cape Town business people find useful since Lufthansa’s service to the city now flies between here and Munich.
Condor in fact offers a huge choice of destinations to most of Europe and to the UK through connecting flights from Frankfurt.
However, many of these are seasonal and available only in our winter months.
GROUNDED: SAA is cancelling its flights to Argentina, saying that the service is operating at a loss.