South African Airways; Airports Company of South Africa; Western Cape Tourism; South African Tourism

Meeting report

ENVIRONMENTAL AFFAIRS AND TOURISM PORTFOLIO COMMITTEE
22 October 2002
SOUTH AFRICAN AIRWAYS; AIRPORTS COMPANY OF SOUTH AFRICA; WESTERN CAPE TOURISM; SOUTH AFRICAN TOURISM

Chairperson: Ms GL Mahlangu (ANC)

Documents handed out:
South African Tourism presentation: Domestic Tourism in SA
What is SAA today?
the following documents are awaited
SAA Parliamentary update
ACSA presentation

SUMMARY
The presentations were clear about the steps that could be taken to improve tourism in the country. It was common cause among the presenters that, to improve and promote tourism in South Africa, it was important to understand the market first. Secondly, to remove all the obstacles impeding the development of tourism. Thirdly, there was a need to monitor the tourism market throughout the country and also to sell South Africa as the ultimate destination for tourism and also to increase the airline capacity. The Committee was informed about the challenges facing South African Airways in the domestic and international airway industry, more specifically after 11 September. SAA highlighted the importance of the need for a stable currency in order to lower the operational costs for SAA.

MINUTES
Mr Victor Nosi: South African Airways, laid out the obstacles and challenges faced by SAA in the airway industry. However, SAA firstly provided the Committee with the recent contribution it has made towards economic and social development. Mr Nosi informed the Committee that their network has been extended over the years because of the alliances it has with other companies in the airway industry. He emphasised that SAA is making an enormous contribution to the economic development of the country.

For example, through its suppliers, SAA is employing about 50 000 people, which amounts to a total spending of two hundred and fifty billion per year. Mr Nosi touched on the strong support that SAA provides to other businesses and cultural events. For example, he informed the Committee that SAA would be sponsoring the up coming Cricket World Cup and through such events many tourists will be coming to the country. Hence Mr Nosi conceded that SAA, for the past ten years, has been marketing South Africa as a destination far more effectively than the brand itself. He informed the Committee that with South African Airways around the world, they generate much foreign currency and SAA is a good South African corporate citizen.

With regard to the challenges facing SAA, Mr Nosi informed the Committee that after September 11, there has been a tremendous decline in demand. This was mainly exacerbated by an increase in operational costs. For example, an escalation in prices, competition from other airline companies, wage adjustment due to growing inflation, fluctuation of airplane fuel costs, increase on risk insurance after September 11, fluctuating currency and so forth. With regard to transformation challenges, Mr Nosi informed the Committee that SAA has established a transformation committee to report to the SAA board on transformation. Mr Nosi concluded by urging for support from the government, especially where the countries currency is constantly fluctuating. (For the full presentation, please refer to the attached document )

Discussion
Prof Mbadi (UDM) was concerned that there was no airlink to the northern parts of the Eastern Cape, which has a beautiful wild coast. He asked SAA to encourage tourists to visits such areas, by making a touch down in places like Umtata, for example.

Mr Moorcroft (DP) was concerned with the on-going theft of luggage at South African airports, which was painting a terrible picture of South Africa as a tourism destination. He was of the view that SAA should attempt to improve security in all its airports respectively.

Mr Le Roux (NNP) was of the view that SAA did not regard demand and supply in respect of domestic flights. Even though SAA service was excellent, their service was not completely friendly. He pointed out that SAA pilots are not interactive with the passengers.

Ms Ndzanga (ANC) highlighted that Sawubona Magazine, owned by SAA, had listed a number of tourist attraction destinations in Gauteng reflecting the history and struggle of this country. For instance, Hector Peterson memorial, Gandhi Hall and so forth. She asked if SAA has made an effort to encourage tourists to visit the aforementioned places as well as encouraging students to visit and learn about these places.

Ms Chalmers (ANC) noted that there has been a very high rate of pilot drain by other air industries from elsewhere which offer them lucrative packages. She asked if SAA had good salary packages for South African pilots to counter this. She also asked for a proper map to be inserted at the back of the Sawubona Magazine to guide international passengers as well as more for more interaction from the pilots.

Mr Arendse (ANC) asked Mr Nosi to further elaborate on the demographics of the deaf pilots. Secondly he asked SAA whether it perceive its contribution as measured by GDB or whether it should be measured in terms of its contribution towards human development. Thirdly, why was it necessary for South African passengers visiting Northern African countries to fly to Europe first?

A Member asked whether SAA had plans to expand the Mpumalanga Airport. He also asked for SAA's position with regards to charter flights.

Ms Ramotsamai (ANC) conceded that the discontinuation of flights to Umtata really discouraged tourism in such destination. Ms Ramotsamai was also concerned about the steep fares to African countries as compared with other international destinations.

The Chairperson highlighted a number of inconveniences when South African passengers are trying to connect with other destinations between African countries. This is mainly because the tellers employed by SAA in their desks in these countries cannot communicate in English. She asked if SAA would be taking any steps to 'South Africanise' those desks.

Ms Mbuyazi (IFP) asked whether SAA had bursaries schemes for people from the designated group so as to encourage black students to become pilots.

Mr September (ANC) indicated that South African citizens should be able to buy shares from SAA. He posed the following questions. Firstly, what training costs did SAA incur towards training pilots? Secondly, did SAA have any specific method of recruiting pilots? Thirdly, was it possible for South Africa to impose a duty free policy on goods flown between African countries?

Mr Nosi (SAA) addressed this cluster of questions at the same time. He firstly informed the Committee that SAA was still in the middle of discussions over the possibility of having smaller aircrafts to access northern parts of the Eastern Cape. He added that SAA was making lots of videos showcasing all the tourism destinations in South Africa including the beautiful wild coast.

With regard to the theft of luggage at the South African airports, Mr Nosi informed the Committee that SAA was putting a great deal of money into improving security in the airports.
With regards to the flying fares Mr Nosi alluded to the Committee that flying fares depended on supply and demand in the flying industry as well as to other factors incidental to that e.g. operational costs and competition from other companies.

Commenting on the Sawubona magazine, Mr Nosi informed the Committee that this magazine was a SAA owned publication and over the past two months SAA has tried to improve the quality of this publication. He conceded that that this magazine could be used as a tool to market tourism in South Africa.

With regards to the proposed duty free on goods flown between African countries, Mr Nosi said that SAA had moved away duty free hence he could not respond to that question.

Presentation by Airports Company of South Africa
Mr Siva Pillay informed the Committee that he would transfer some of the deliberations raised by Members to the ACSA national executive, especially the concerns that were raised about security in the airports. A White Paper was currently in the pipeline in respect of air control and civil aviation.

Presentation by Western Cape Tourism
Mr Fabricius was of the view that there was a need to build on airline access especially on the busy routes to Europe. Secondly, and most importantly, there is a need for a strong flagship carrier airline like SAA. He was concerned about the adverse impact of seasonal variations on tourism in the country mainly because in certain seasons tourism would decline rapidly. There was a need for a strategy to curb those seasonal variations and to provide the tourists with quite a range of options throughout the year.

Mr Fabricius was also of the view that there was a need for excellent rail transport to spread the tourists around the country. It was crucial to firmly regulate and re-package public transport and also improve safety standards. Therefore that would make it easier for the tourists when touring the country to access all modes of transport.

Presentation by South African Tourism
Mr Sanjiv Singh conducted the presentation on behalf of South African Tourism. Please refer to the attached document.

Discussion
Mr September (ANC) observed that there was a vast amount of traffic between Cape Town and the Eastern Cape. There was, therefore, a need to have a railway line operating on this route

Mr Arendse (ANC) asked whether there were any people representing and marketing South Africa as a tourism destination abroad.

Mr Singh informed the Committee that the Department of Environmental Affairs and Tourism has been working with the Department of Foreign Affairs to build the capacity of tourism abroad.

The Chairperson concluded by thanking all the presenters and was of the view that the meeting was of great value and policies would probably be put in place to unpack all the obstacles faced in the tourism industry.

The meeting was adjourned