The current CEO of Air Zimbabwe, Edmund Makona, likes to quote a previous IATA Director General, Tony Tyler, as saying that the natural state of the airline industry is one of crisis, interrupted by brief moments of stability and calmness. Being in a perpetual state of crisis implies that there must be burning issues.
Makona references IATA’s finding that collectively, African airlines are making just 90 US cents profit per ticket sold. And importantly, this 90 cents is almost entirely being made by just two airlines – Ethiopian and FlySafair. This means that almost every other airline is making losses. So for Makona the burning issues remain the excessive charges, taxes and levies imposed on African airlines.
When airlines fail because they are not sustainable, Makona says, “All the benefits of aviation are lost to the broader economy. While there are other modes of transportation, aviation is the one that most quickly creates [essential commerce and transport] links to other countries.
“The challenge is that we must be as efficient as other companies if we are to cover the costs of aircraft lease, maintenance and fuel. The burning issue then is that we must become competitive, which means that we are going to have to learn to be innovative, and in particular, to share routes and resources. In so doing, we can share costs and technology, so we don’t have to be one airline trying to cover all the routes everywhere.”
Makona concludes, “We need to fix ourselves and not be the victims of things like the Cape Town Convention. There’s an old saying that when an egg is broken from the outside life dies, but when an egg is broken from the inside, that’s when life starts.”
For FlySafair CEO Elmar, his burning issue is, “I would like to see a considered attempt to reduce the amount of regulation. We need deregulation so that the costs can come down, especially amongst the providers of fuel and services. We put too little trust in the free market to sort things out.”
Conradie says, “Success comes from embracing competition to provide efficiencies and a better product. There are things that we can control, and things that we cannot control in terms of the markets we serve.’
For Conradie a specific burning issue is that, “There is a shortage of [seat supply] capacity. This may seem strange to say after the surplus capacity of last year. But this lack of capacity is easy to fix. As an industry, I think that there is much that we can do. They are not difficult things, but very fundamental things that we can achieve in each service provider.”
Conradie quotes the example of the famous British cycling team coach, Dave Brailsford, who developed the practice of achieving marginal gains to make his team champions. Conradie says that Brailsford’s philosophy is, “You can use small improvements to get 1 percent better every day and find success.”
Brailsford called it the aggregate of marginal gains. He broke down cycling into its component parts and said that if you can improve each of those components by just 1% you will transform the performance.
Applying the 1% principle, Conradie says, “For example, a burning issue would be to improve regulator performance so that we can get Foreign Operator Permits (FOPs) approved 1% faster or Air Operator’s Certificates (AOCs), approved 1% faster. And if we can get people through immigration just 1% faster, then the gains that we will see as an industry will be way more than that. So my plea is for everyone to just get back to doing the fundamentals better.”
Conradie concludes by saying, “We need to sit down with the regulators and put the burning issues on the table and get them to work with us, rather than against us. We need to workshop the issue so we can prioritise the key issues. And then hold them accountable to these issues.”