Structural Changes in the SA Aviation Industry

A new airline is reportedly seeking a certificate and air service licence issued by the Air Service Licensing Council in SA in order to gain admittance into the local South African airspace. This should be good news for consumers.

The Business Day carries the following excerpt:

"A NEW airline flying between Cape Town, Durban and Johannesburg may grace SA’s skies this year, adding to competition in a sector traded by at least three budget airlines and South African Airways.  Very little is known about the backers of Durban-based Velvet Sky, and a source who did not wish to be named said yesterday that it would be premature to comment on plans.....

SA’s airline industry is in a state of structural change, with premium national airlines such as South African Airways losing market share against no-frills competitors such as JSE-listed 1time and kulula.com.

Last month, low-cost airline Mango took over all the Durban-to-Cape Town flights from its parent, South African Airways. The move has been interpreted as part of a strategy by the national carrier to exit short-haul routes where it has lost market share."

African Competition Program

UNCTAD last year launched the Africa Competition Programme (AFRICOMP), a capacity-building and technical assistance programme on competition law and policy for the African countries.

The objective of the Programme is to:

• Assist African countries in formulating and enforcing competition law and policy.
• Encourage partnerships between international organizations and agencies; and interaction with regional organizations and civil society

AFRICOMP emphasizes ownership by beneficiary countries and demand-driven technical cooperation and it seeks to establish closer links with the private sector and more especially with NGOs and local learning institutions.

Competitive markets drive an economy’s resources towards their fullest and most efficient uses, thereby providing a fundamental basis for economic development. In Africa, effective enforcement of a competition policy system is expected to facilitate the process by which innovative, cutting-edge technologies replace the usually less efficient productive capacities now in use in parts of the continent. The market forces are expected to continuously prod the local enterprises to innovate – that is, to develop new products, services, methods of doing business, and technologies – that will enable them to compete more successfully on national, regional and international markets.

UNCTAD provides competition authorities from developing countries and economies in transition with a comprehensive development-focused intergovernmental forum for addressing practical competition law and policy issues 

Competition resources can be accessed here.