Sun City, Friday 28 October 1999
Master of ceremonies
Chief executive, AASA, Mr. John Morrison
Chairperson of AASA
Honoured guests
Ladies and gentlemen
I thank the Airline Association of Southern Africa for inviting me to attend this evening's dinner. It is a wonderful occasion. Allow me to congratulate the AASA on the holding of its annual general meeting. I understand that you completed the AGM part of your proceedings and I trust that your deliberations were successful. I wish the association success in its activities and want you to know that as minister, I will be available to meet with you at all times to discuss issues of common concern.
I come tonight at a time when you have already completed much of your work. I am like the rugby player performing bench duties and running onto the field as a substitute after half-time - much like the English rugby team who in the second half against south Africa on Sunday, sent on one substitute after another. But it did not help the substitutes. Nor did it help England. I hope to be more successful than our English rugby friends.
I am also impressed with the way you have organised your events. I am not speaking about the social events - about that I would rather remain silent. But I notice that you have combined the AGM part of your weekend with a seminar. This of course enables AASA to go through the business agenda of the organisation to prepare it for the year ahead and at the same time to get together with other stakeholders and experts to have in-depth discussions and debates on issues which are vital to the future of the airline industry.
I want to congratulate AASA and its leadership for their contribution in the past and your ongoing work. I wish you success in your future endeavours and offer you my co-operation. In my current capacity I will undoubtedly have to deal with a number of controversial issues. It would be dishonest of me to promise that I will always accept your proposals. That I cannot do. But your proposals will always receive serious consideration. I also believe that I do not have to take arbitrary decisions.
I follow four guidelines:
Your open session earlier today gave different stakeholders in the aviation sector an opportunity to air their views and to engage in discussions with the airline industry. I notice that participants included distinguished experts and representatives from outside south Africa. I want to say to them how welcome they are and to thank them for coming.
The subject matters of your two panel discussion sessions tomorrow are obviously highly topical, namely: "Is the global airline concept in Southern Africa's interest?" And "user charges - do airlines receive value for money".
It would be foolhardy for me to pre-empt those discussions in any way. I have no doubt that the discussions on those issues will be of great benefit to all of us to enable us to arrive at solutions which are fair and equitable.
May I make special mention of the airline representatives from Malawi, Botswana, Zambia, Mauritius, Zimbabwe and Namibia, who are here. Your presence is very important to us. We can no longer, as south Africans, only speak of south Africa and the airline industry in south Africa. The world has changed radically over the past 10 to 15 years. At the very least we must develop a regional Southern African vision, but as Africans, also a continental African vision. Even then the new economic environment compels us to adopt a global vision as well. The future of airlines depends on our ability to successfully compete in the broader environment to which I have referred.
I cannot over-emphasize the importance of a Southern African regional approach, but also how we see our place in the region. I refer not only to the airline industry, but all our economic activity. Today, south Africa is an integral part and equal partner in the Southern African development community. But it was not always so. When SADC was formed, the major problem facing it was a hostile and aggressive south Africa. Apartheid south Africa, fighting a war for its own survival against the liberation movements which had taken up arms to end the apartheid system and to create a democratic order, did everything in its power to weaken and paralyse our neighbouring states because of their support for the liberation struggle.
The former SADF caused much devastation in SADC countries, as a result of which they suffered economic dislocation, infrastructural devastation and human loss.
The ending of apartheid and the birth of the democratic order in 1994 put an end to the conflict between south Africa and the other countries of Southern Africa. It enabled south Africa to join SADC and work together with other SADC countries for the common benefit of the whole region.
Because of that history, we as south Africans must make sure that we do not project ourselves as a kind of big brother of the region. We are nothing less, but nothing more than an equal partner. This equality must be reflected in the way we deal with issues in our region. The south African government is very clear about it. It sees its own development as part of the development of the Southern African region as a whole. It is in our interest that we must also promote the interests and the economic development of all SADC countries. Whilst, therefore, we are moving to bring our country and economy into line with world trends, we must do so in a way which promotes the interests of the Southern African development community as a whole.
In that context all of us must look at the implementation of the SADC protocol, covering the areas especially of transport and communication.
It is good to know that 9 SADC member states, namely south Africa, Botswana, Namibia, Lesotho, Malawi, Mauritius, Tanzania, Zimbabwe and Zambia have volunteered to open their aviation safety oversight facilities to be audited. This is in line with ICAO's programme of safety oversight assessments. Many SADC states are already well advanced in implementing the ICAO recommendations to improve aviation safety in our region.
Within SADC we have also established partnerships for the implementation of CNS/adm systems. The VSAT system installed to improve communication between air traffic units in the region, is operational in 13 of the 14 SADC states.
Discussions have commenced to establish the joint provision of air navigation services, both within our region and Africa as a whole.
You know better than I do that globalization and the international nature of aviation require a high degree of standardization of aviation safety. A fragmentation of standards can only hamper the development of a truly safe and global aviation industry. Therefore to benefit our industry and give effect to these strategic initiatives, the challenge is not only for governments to relinquish sovereign control of their civil airspace to a central airspace control authority, but also to co-operate together in harmonizing standards, establishing common licensing mechanisms and standardizing technology. The new economic environment poses a great challenge to the airline industry. It needs to move faster to create a competitive, effective, regional airline industry in the SADC region. There is great potential in Southern Africa, especially for our tourism market. SADC needs to market Southern Africa as a single tourism destination. We must make it possible for cargo and people to be transported safely throughout the region at competitive prices. If we are to meet the challenges of our times, we need to vigorously pursue the opportunities the market presents by facilitating the process of liberalizing the SADC market and harmonizing our aviation activities, legislation and regulation. We need to do so, however, in an orderly way which promotes the interests of our region.
Soon after taking office, I had the privilege of meeting with chief executive officer, Mr. John Morrison and two of his industry colleagues. They raised with me issues of concern, particularly the increased costs which the industry is facing. High on the agenda was the issue of tariffs, charges and levies. As a point of departure, I must make the point that I strongly believe that tariffs, charges and levies in the industry must be competitive and commercially reasonable. They must be subjected to scrutiny on the basis of the criteria which I set out earlier.
Let me say in this regard that the institutional transformation in the transport sector through which we created a number of agencies, was not and is not intended to promote profiteering. It is to introduce sound commercial practices in all areas of aviation economic activity.
In the light of our experiences over the past five years - new in the history of South Africa - we are looking afresh critically at our role as a department in the aviation industry. In the same way we intend to participate fully as the shareholding ministry of the ATNS and ACSA. It is government's responsibility to ensure that the CAA operates within the framework of minimum civil aviation standards and that we fulfil our international obligations. In this regard the CAA must deliver and we will maintain our vigilance to ensure that it is able to do so. At the same time it is clear that safety objectives can only be achieved through the acceptance of co-responsibility. Regulators and operators need to co-operate to promote safety.
In the same way we will monitor all aviation activity, particularly as it relates to charges and levies.
Part of the institutional reform over the past few years has been the creation of a number of statutory bodies, such as the international air services council, the air service licensing council and the regulating committee. They operate autonomously resulting in better economic regulation.
There is however work still to be done. Issues relating to market access, the regulation of monopolies, the management of anti-competitive behaviour and investment in the airline industry must be evaluated. Strategies to counteract the threats and optimise the opportunities presented by globalization must be developed. In this context we must look at wetleasing, airline co-operation as well as the extent to which we liberalise the international airport transport market, taking into account the interests of the Southern African region and the continent as a whole.
Developments have also shown that in certain cases a company's monopolistic nature potentially extends further than the regulated aeronautical charges. In this context, the issue of ringfencing and user charges have been raised. The question before us is how can we maximise competitive practices within a monopolistic environment and generally how do we deal with the situation to ensure that the industry is not unduly burdened and the interests of the public protected.
The tendency towards reconsolidation within the airline industry has raised the question whether there is no threat to competition.
Through the regulatory bodies the department will seek to encourage the development and maintenance of an industry in which efficient South African airlines can operate profitably, and in which competition between domestic carriers and between South African and foreign carriers can flourish and importantly consumer choice is enhanced. As re-consolidation may threaten fair competition and consumer choice, we are consulting the newly established competition commission to co-ordinate expeditious investigations into allegations of anti-competitive behaviour within the airline industry. The department is also investigating the possibility of re-introducing the regulation of fares to ensure that where airlines possess and exploit market powers to the disadvantage of users, such fares are disallowed. In this regard the interests of consumers must be protected.
Finally there are two matters of great importance to us all.
The first relates to the HIV/aids pandemic which is sweeping the sub-continent. It is a very serious matter. It affects us all. There is much that we can do in the airline industry to participate in the national programme of action to prevent the spread of the disease and to develop a programme of counseling, support services, prevent discrimination and generally to do those things which will help the country to overcome the problem. A number of countries, for example Uganda, have developed very effective programmes. I ask you to participate in the campaign.
Secondly, and here I speak of South Africa, there is The glaring absence of participation by black people and women in the industry. This of course is not only a problem facing the airline industry. It exists elsewhere, but I do believe that we must look at ourselves and begin to address the problem. It is striking how few black people and women are employed at all levels in the industry. I can indicate to you that I have already spoken to the chief executive officers of the CAA, ACSA and the ATNS and have requested that we work on a concrete plan for the industry with fixed time frames, so that we begin to address the lack of representivity in the industry. It is in my view no longer sufficient to have an employment equity plan. We need an implementation plan and as I say, with time frames, which includes a training and development plan for fast tracking the process which will ensure representivity within the industry. What is more, the culture within institutions need to be actively transformed to ensure that the services of black people and black women are actively recruited and thereafter retained. It is also my view that all levels of management should be held accountable in terms of their Performance agreements for achieving those national objectives.
Thank you for giving me the opportunity of speaking to you. Thank you for your patience. May I wish you continued success in your deliberations.