SA needs a national airline

Oct 17, 12 SA needs a national airline

SAA needs another bail-out. The market-oriented commentators are livid. How, they ask, can it be reasonable for a country like South Africa to continue to pay for an unprofitable airline. A country like South Africa, is exactly the point. Because South Africa is a country with means and opportunity.

An awful lot of commentators seem to be drinking the “poor-us” koolaid. South Africa is not a poor, destitute country that can barely afford to send children to school. In fact, South Africa’s education budget is obscenely large when compared to some of our poor neighbours. Money exists in the South African budget to pay for things. Tax revenue allows the country to invest in the things we need. More importantly, tax revenue is available to be invested in the things that will increase the tax base and grow the economy. A significantly redistributive tax system is a necessity in a post-Apartheid, horribly unequal society. But the aim must be to use the tax system to stimulate growth in those areas and for those people previously excluded.

One of the ways to do this – and a pretty solid way to achieve measurable results (if almost every other country in the world is anything to go by) – is investing in transport infrastructure. Nothing slows the growth of a market or sector like not being able to move people and goods. South Africa, having realised this, is investing heavily in transport infrastructure. Trains and automobiles, or at least roads, are high on the priority list. As are ports. Why is it that commentators seem to be under the impression that planes should somehow be excluded? Planes, trains and automobiles. And boats. This a massive and fundamental part of the puzzle of how to fix South Africa’s economy. Made more fundamental by the size of the country and spatial disparities created by Apartheid.

Of course, the particular set-up of South Africa’s national carrier makes this a little tricky. SAA needs to be flying to places no-one else is flying to, both on the continent and in South Africa. Flights to destinations in Africa can open up those markets for South African companies. Africa is and will increasingly be, an important market. South Africa would be short-sighted and, frankly, dumb, to ignore it. Within the country, there is a desperate need to ensure that outlying and rural capitals, which, yes, include Upington, Kimberley and East London, are served with air travel options. Stimulating development in mutiple hubs is essential to ensuring the whole country develops (instead of just Gauteng).

Nay-sayers would like to close down SAA. They see no purpose to having a national airline. They also probably don’t see the purpose of, for example, rejuvenating the railways. They’d like lower taxes and less government spending on frivolous things like infrastructure. Luckily for the rest of us, and those who don’t live in cities, South Africa’s government remains committed to real development with widespread benefits. Perhaps SAA needs to be restructured. Perhaps some of the more lucrative flights, such as the Durban-Johannesburg route, should be shut down. Perhaps it’s time to drop the pretence that a national carrier should be a profitable company and applaude SAA for what it could be – subsidised public transport and an investment in economic development.

 

Image by Meraj Chhaya