Aviation analyst, Phuthego Mojapele, said much as the industry had expected some changes, the disbandment of the DPE had dire consequences for the aviation space. Photo: DAVID RITCHIE Independent Newspapers.
The disbanding of the Department of Public Enterprises (DPE) to the Presidency might spell doom for South African Airways (SAA) as the detailed oversight it needed could be lost among the other portfolios. Also, it will only report to Parliament as a matter of process, an aviation analyst observed in the aftermath of the formation of the government of National Unity (GNU).
Commenting on the heightened interest in South African skies noted from increased applications before the International Air Services Licensing Council (IASLC), aviation analyst Phuthego Mojapele said much as the industry had expected some changes, the disbandment of the DPE had dire consequences for the aviation space.
“The Presidency is more of a watchdog and not a department that can answer in detail to Parliament. There might be questions that could arise which the Presidency would defer, as it is occupied with a lot of other pressing work. This spells a bleak future for SAA,” Mojapele said.
He said a lot of capacity in the DPE that had been built up for the management of SAA and the aviation sector would now be misdirected, as some officials had taken the trouble to up-skill themselves in the sector and it is understood they would now have to continue with different line of work.
“I am not doubting the Presidency’s ability to come up with solutions, but it is not a small department in itself and aviation cannot go in there and require more attention,” he said.
This is as the IASLC last week issued notices for comment on applications for Foreign Ownership Permits (FOPs) sought by the US’s United Airlines, Singapore Airlines, Air Botswana and Congo’s Compagnie Africaine D’Aviation, which all sought increased routes in the South African aviation landscape.
Aviation insiders have warned of excessive interest in South Africa’s unserved international routes, and warned of reciprocity with regional carriers with extensive red tape while the International Air Services Licensing Council (IASLC) mulls several applications to slice up the South African skies.
“Some of these applications are to markets served by SAA. I would be careful about giving away too many FOPs to these airlines because they will eventually take everything. There is too much at stake. They are already eating the SAA market between Cape Town and Houston,Texas, with all the farmers who regularly transit between Cape Town and Texas. By the time we come back there might not be a market to fulfil,“ Mojapele remarked.
United Airlines had applied for a 12-month extension to its FOP which allows it to fly between between Cape Town, Newark, New Jersey and Washington DC. Singapore Airlines, with daily flights to Johannesburg is looking to add Durban and Cape Town.
Air Botswana, which flies between Cape Town and Gabrone looks to add Durban and Oliver Tambo International Airport (OR) in a mix to destinations including Kasane and Maun.
President Cyril Ramaphosa, in announcing his Cabinet said there would no longer be a DPE and the coordination of the relevant public enterprises will be located in the Presidency during the process of implementing a new shareholder model.
The Presidency has thus far indicated that Transnet would be under the oversight of Maropene Ramokgopa, the newly appointed minister in the Presidency for Planning, Monitoring, and Evaluation.
BUSINESS REPORT