Low-cost airports are one the ideas the Department of Transport is considering as part of a bigger plan to bring long-term financial sustainability to the low-cost airline industry.

The department is together working with the low-cost airline operators in South Africa to come up with proposals on how to assist the low-cost airlines so that they don’t come and go as quickly as they seem to.

The proposals revolve around ideas for how the low-cost airline industry should be regulated, and the operators will submit their own proposals to the department by December this year.

The department will then consider them when it finalises its draft white paper on civil aviation policy.

It wants to nurture the industry.

Johan Bierman, acting deputy director-general in the civil aviation branch of the department, yesterday briefed Parliament’s portfolio committee on transport on the cost pressures facing low-cost airlines.

The government wants to create support programmes for low-cost airlines, and Bierman said the high airport charges imposed by the Airports Company SA were not suitable for low-cost airlines.

There is a need to unlock the benefits of aviation and create space for a new model of low-cost airlines. The issue is whether low-cost airlines are able to generate sufficient revenue with lower fares to cover an only slightly lower cost base.

There was also the advantage that some low-cost airlines had: shared costs with parent companies, such as Mango and SAA, and kulula.com and British Airways.

In the case of SAA and Mango, Bierman explained it was important to make sure Mango doesn’t derive an unfair advantage over others.

While emphasising the fact that the government did not want to curb access to the airline industry in its revised policy document, Bierman said government was concerned that instability and consumer distrust had developed because of business failure in what was now a deregulated airline market.

Ivo Vegter will be stoked.

[Source: Business Day]