“As the global economic crisis persists, some airlines would rather look on the optimistic side when the economic turbulence would blow over. South African Express Airways is one of enthusiastic carriers reviewing operations to further improve their good performance. Its CEO, Ms. Siza Mzimela, here speaks to Aviation & Allied Business on challenging issues on the African airlines turf.”
Excerpts:
Q: The IOSA has come up strong as a factor to improve airline safety. Could you say where South African Express is currently on the IOSA?
A: We have completed the audits and all audit findings have been closed. The only outstanding item is for us to get the certification from IATA confirming our compliance. We have gone through all the critical processes and we believe we have met all the requirements as per the audit.
Q: Did you have any assistance from, say, South African Airways or any other airline in Africa on the IOSA?
A: No, we did not receive any assistance from South African Airways. South African Express was at an advantage because our airline was exposed to the preparation process implemented by other carriers for the IOSA audit. Moreso, we already have very good systems in place. Actually, when audited, the gaps South African Express needed to close were significantly lower than any other place that was previously audited.
Q: SAX has been returning net profits over the years in spite of the challenges of the industry, fuel costs, etc. How has SAX been able to do this?
A: We are keeping the focus on our strategy. It clearly highlights that we use small aircraft with high frequency. South African Express is not a low-cost carrier, but we make sure that we pursue low-cost principles in terms of trying to manage our costs. It is something that we continue to benchmark to make sure that we remain competitive. We understand that we are ultimately able to do this because we have the right equipment, the right strategy, and of course, the right people.
Q: Where is SAX in e-ticketing as at today?
A: South African Express is fully compliant because we are in alliance with SAA, and we use the same systems.
Q: How has SAX been able to manage its manpower resources and what do you think African airlines should do?
A: Like other carriers, South African Express is also affected. To combat this, our airline has already started its own exclusive cadet pilot training programme. In 2008, we took 8 new pilots into our cadet school. So, as much as we are losing personnel, we are also building up capacity so that we are able to address the shortage. We may not be able to compete with the type of salaries that the Middle East carriers have to offer, but at the same time, there are so many young people out there who have interest in coming into this area, and I think we definitely should put a little more investment and try to put the cost at the bottom. Operating an airline must be in an enabling environment, an environment which will make pilots feel they belong to the organization. One good thing about South African Express is that we do not fly intercontinental routes, and you also realize that when the pilots go out to other places they return quickly because there they realize they are mercenaries and that money is not the only influential factor in decision making. They also want good quality of life.
Q: Your training is commendable, but how do you retain staff?
A: For staff retention, we are also putting together incentives to encourage people to stay with our organisation. This is working very well. I am not saying we are not losing staff, but we are not losing staff as quickly as other organizations. When people get to a certain age they realize that money is not everything, and we offer market-based salaries. In addition, we are a company that is doing quite well. In the last two years we have recorded net profits and our pilots and operations staff benefit from this profit in the form of incentives. We also try to promote a very family-oriented organization because we understand that most people spend most of their time at work as opposed to their homes. There is the definite need to make people feel valued, and although we may not get it right all the time, I think we are doing a good job at retaining our employees. In fact, this is one thing that people complement us about. Our employees will leave, but because we have such a unique environment at our organization, within three months they decide to come back. We are one happy family and everybody’s interest matters.
Q: What is responsible for the impressive growth in your fleet?
A: We identify the right opportunities, and we have not tried to compete with competitors on the primary routes. We believe much still has tobe done domestically in South Africa, and beyond. Most of our growth goes to the rest of the region in Southern Africa – because we remain focused on our strategy, we do not intend to operate to the primary airports that other carriers want to go to. We’d rather go to the secondary airports where we know that we are providing a valuable service that is not usual at those locations.
Q: What about infrastructure in these secondary airports? 
A: Flying into these secondary airports comes with its good and bad. However, we view the negative as an opportunity to play a more active role in improving the infrastructure. Also, everything is about negotiation. Sometimes, when you are going to a market you say: ‘If I have to fly here, the following must be in place,’ as long as there is willingness from the other party to develop a successful relationship. For example, if the other party does not have the capital to fix the infrastructure, then you can say ‘I will fix it but because am going to pay you rent for this facility, you should give me a payment holiday.’ Sometimes the assistance we have to render does not involve large amounts of money, but little things that will affect the quality of the airport.
Q: How do you think that YD will be implemented faster given the opinions that YD may not be achieved in the next ten years?
A: It would be unrealistic to confirm that the YD will be implemented in the next ten years in its current form. Firstly, we need to open up our skies a little bit more, this will ensure that there is a minimum number of frequencies made available for airlines to operate between countries. When we talk about Open Skies, there are countries today with only two services or six services permitted per week – we definitely cannot go from two to Open Skies. Within the next ten years, I am confident that we will find a way of moving towards Open Skies in a more progressive manner.
Q: How do you think that African airlines can improve the safety of their operations and how can African airlines help to improve the continent’s safety image?
A: If you look at those airlines in Africa that have very good safety records, you would see that the safety record is because they have a strong Civil Aviation Authority and regulatory environment as well. Airlines need to constantly look at improving the safety in our operation. I don’t think that there is any airline that does not know that one incident could shut down their business. I really don’t think that the poor record is evidence of airlines not caring about safety, but I think at some point we need to look beyond that to say: What are the authorities doing? Do the authorities understand what their responsibilities are? If not, how can they improve? If the authorities improve, then the airlines will also improve. They are the ones that are required to give us the rules and the regulations. They have the responsibility to see to it that airlines do things according to the book. As Africans, we really need to learn to cooperate. There is nothing wrong in asking for assistance from another Civil Aviation Authority where one lacks capacity, because at the end of the day, it is the image of Africa as a whole that is involved. When something happens in the international community, the public will not say: ‘it’s a South African carrier’, they are going to attribute it to all African airlines. So, we all have a stake in improving civil aviation in Africa, and there are countries that are way ahead that we must learn from.
Q: How is SAX engaging the global financial crisis facing the industry?
A: At the end of the day, it comes down to focus. At South African Express we try to make sure that we build efficiencies in our business. We have to find smarter ways of conducting business. When people talk about efficiency it is not necessarily about cutting costs. Sometimes, it is about finding ways of doing what you do better. If we are smarter, there may be no need for us to increase the number of people doing the job. If we are lean, the better our chances to survive the downturn.
Q: Are you cutting down on routes or frequencies as a result of the downturn?
A: No, as mentioned, South African Express is focusing on its core strategy, which is to consolidate its operations and conduct business where it is most viable and profitable.
Q: Would you say the drop in fuel price has made significant impact on your operations despite the recession?
A: Of course the drop in fuel price has made a difference; however, the recession still affects our industry. High operating costs have to be taken in account as well as the fact that some customers have cut back on air travel as a result of the recession. These are challenges we have to address.
Q: What is your outlook for South African Express for 2009 in terms of revenue and passenger traffic especially compared to last year 2008?
A: 2009 is projected to be a tough year for the aviation industry, but at South African Express, we remain optimistic that our strategy, coupled with cost containment and improving efficiencies in our business will assist in maintaining our profitability and possibly increasing passenger traffic.
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