5 December 2007
Feeder airline South African Express is to be shifted from state-owned Transnet to the Department of Public Enterprises, freeing it up to expand its routes and increase its flight capacity and frequency as it moves to become a leading southern African regional airline.
According to a statement issued by the Department of Public Enterprises last month, the transaction is called for by the South African Express Bill, which has been put before the National Council of Provinces (NCOP) for approval.
“The airline is of strategic importance as its growth will add to the overall air services capacity,” Public Enterprises Minister Alec Erwin said. “Our objective is to make air travel more accessible and to complement the national and international services of [South African Airways] and other South African carriers.”
South African Express (SAX) is essentially a regional carrier, operating where the main carriers do not. By acting as a feeder airline to other national and international airlines through larger hubs, it plays a vital role in air travel.
“This is a specific function and we are looking to expand it both in the region and possibly into other regions of Africa,” Erwin said.
“To have merged the airline into [SA Airways] would have lost its focus, and to have sold it to other carriers at this stage would have lost us the opportunity for the strategic strengthening of South Africa’s air transport system.”
Erwin said the South African Express Bill was one of the final steps towards making Transnet a freight transport company, focused wholly on rail, ports and pipelines, while ensuring that South African Express could make a more meaningful contribution to the country’s aviation industry as a stand-alone public enterprise.
He said that the airline would be given the necessary commercial autonomy, adding that once a stable air travel system was established in the country and the region, it would be possible for the state to reassess its role in the ownership of SAX.
He also pointed out that despite the aviation industry being a challenging and volatile one at the best of times, SAX had managed to remain profitable, while also expanding its route network.
The airline currently flies to areas such as Walvis Bay in Namibia, Lubumbashi in the Democratic Republic of Congo, Maputo in Mozambique and Victoria Falls in Zimbabwe, and is keen to increase the frequency and capacity of its services between Johannesburg and Lubumbashi and Victoria Falls, as well as on the Cape Town to Maputo routes.
“This is a great platform for the expansion of the airline’s services to the rest of the continent,” Erwin said. “Such expansion will be very important in SAX’s strategy to be the prime regional airline.”
Erwin added that the aviation industry plays a big role in the country’s tourism sector, which has been identified as a key driver for increased job creation and economic growth by the Accelerated and Shared Growth Initiative for South Africa (Asgi-SA)
“By retaining SAX in state hands, [the] government can oversee that this growth and employment does occur,” he said.