Airlink’s objection to sa express at the international air services licencing councilDate: 07 Oct 2019
Airlink wishes to set the record straight on its objection to SA Express’s being granted permission to operate international air services to Zimbabwe, Botswana and Angola.
Airlinks’ objection, lodged with the International Air Services Council (“IASC”) against granting of an amendment to SA Express’s international air services license, is not intended to preclude competition. On the contrary, it is to demand fair competition.
Our objection relates specifically to the application of and compliance with national legislation that requires all South African carriers operating international air services, demonstrate their “financial capability” and “are able to operate an international air service” when applying for air services licences or amendments to them.
It is a well-documented fact that SA Express has failed to table its annual financial statements for the past three years. The airline’s acting chairperson and the Minister for Public Enterprises have both separately advised Parliament that SA Express is experiencing “financial difficulties” and, according to the Minister, ”not a going concern”, despite having received over R1.5 billion in government bailouts this year.
South Africa’s International Air Services Regulations stipulate that all applicants must submit their financial data in support of their applications for new or amended air services licences. Precedent, according to Airlink’s experience, is that applicants are required to submit their audited annual financial statements and demonstrate that at the time of the application they are not insolvent, that they have the financial means to undertake the additional air services and that they are a going concern.
The regulations also require applicants to furnish the Council with information on its licenced personnel and fleet. Last month, SA Express advised Parliament’s Select Committee on Public Enterprises that it was currently able to operate just four of the 11 aircraft on its licence and that its fleet expansion plan had been delayed due to “liquidity challenges”.
The Council’s approval of SA Express’s application to operate the additional international routes, in the absence of this financial information, having regard for the fact that SA Express is experiencing financial difficulties and is not a going concern, and in the knowledge that the majority of the airlines’ fleet was unserviceable, is prejudicial to the general public and the air service industry.
The law makes no provision for preferential treatment of state-owned airlines in the granting of licenses or amendments to the detriment of the private sector and should be applied fairly and equitably if South African businesses are to thrive and deliver the contributions our society and economy so desperately need.
Airlink has, and will always be willing to compete in every market and continues to do on almost all of the 55 routes it serves with more than 60,000 flights annually and without any assistance from the fiscus.
We strongly believe competition should be fair. Competing with state-subsidised perpetual loss-making competitors, that lack a profit imperative, receive tax-payer bailouts and which, by its own admission, is unable to keep all of its aircraft airworthy with nearly a quarter of its flights in Q1 and Q2 of 2019 being delayed or cancelled, is grossly unfair.
Our discerning customers make their choices based on the safety, reliability and convenience of our services.
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