Government must subsidise airline industry – 1time Airline

Following inaccurate media reports about 1time Airline asking government for a “bailout”, the company would like to clarify the situation and inform the public about what really happened.

1time’s Business Rescue practitioners sent a White Paper, titled Airline Industry Subsidisation, to various ministerial bodies on Tuesday, 2 October 2012.

The three-page document covers the state of the low cost industry, the specialised employment opportunities that 1time has created for its 1100+ employees and 500+ service providers, challenges pertaining to costs and revenue structures, as well as the importance of fair competition and choice for consumers.

In conclusion, the document proposes that government considers subsidising the airline industry as a whole with selected levies and taxes, and do not only offer unfair bailouts to the national carrier, South African Airways.

The verbatim request for assistance is included herewith:

“A reduction in the fuel levy and taxes to the Aviation industry to reduce the significant cost of fuel.”

“A reduction in statutory levies and taxes the likes of charges by Airports Company of South Africa, Air Traffic Navigation Services, South African Civil Aviation Authority, South African Weather Services and the likes.”

“These reductions in turn flow into the industry as a subsidy and benefit all and achieve the job retentions whilst supporting the consumer needs for travel and tourism.”

As can been seen, 1time wished to provide clarity that the airline will never and has never asked for a hand out. In this instance, 1time is merely reiterating that the industry is operating under very difficult trading conditions and could do with a hand up.  The subsidisation from government will benefit the industry as well as the travelling public by keeping fares as low and competitive as possible.

Author: Muzi Mohale

Hi there, am your host and I blog about the tourism industry in South Africa. You're also welcome to contribute your expert content on matters affecting the industry. You can reach me on muzi[at]tourismedition.com

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