The Western Cape’s tourism sector, which now counts the US as its key source market for inbound travel, has received a major boost with the national government set to give America’s Delta Air Lines the green light to fly a triangular route between Atlanta, Johannesburg and Cape Town.
The Western Cape provincial government has, for the better part of a year, been pushing for Delta to be granted a so-called co-terminalisation licence, meaning the airline would be able to offload and board new passengers in both Johannesburg and Cape Town.
The provincial government subsequently declared an intergovernmental dispute with the national government relating to how foreign operator permit applications are processed.
Delta’s sole SA destination has always been Johannesburg, in line with its licensing conditions.
In 2020, Delta proposed including Cape Town in its route but the government rejected the application — a move which industry players suggested was meant to protect local airlines which were reeling due to pandemic-induced restrictions.
In a retaliatory response in 2021, Washington moved to limit SA national carrier SAA’s operations in the US by denying it the right to fly to coterminal points in the country.
Business Day has been reliably informed that the state has now acceded to Delta’s request, with an official announcement expected this week
The liberalisation of the air transport market is considered crucial for driving post-pandemic economic recovery. Opening up the skies could translate into greater options for travellers and lower fares, thus boosting the tourism sector’s recovery.
The World Bank has previously stated that many African countries restrict air service markets to protect the share held by state-owned air carriers.
Western Cape finance & economic opportunities MEC David Maynier said on Monday that while the province welcomes the granting of the Delta licence to ply the Cape Town route, the intergovernmental dispute with the national government will continue to ensure that all foreign operator permit applications are processed in accordance with existing national policy, legislation and agreements.
He said the province wants to ensure that all foreign operator permit applications are processed by the responsible person, which in this case is the chair of the International Air Services Council, with administrative support from the national department of transport.
“We regard the approval of Delta Air Lines’ application to fly a triangular route between Atlanta, Johannesburg and Cape Town as a very big win and we will continue to work hard to expand air access because more flights means more tourists, and more tourists means more jobs in the Western Cape,” Maynier said.
Before Covid-19 struck, tourism was the mainstay of the Western Cape economy, contributing about R15bn in 2019 and responsible for 300,000 jobs.
Maynier previously pointed out that there is clearly a surge in demand for direct flights from the US to Cape Town, amid deepening trade relations. Delta is also pushing to fly its 306-seat Airbus A350-900 aircraft on a nonstop basis between Atlanta and Cape Town. The airline hopes to start operations in November 2022, depending on the travel restrictions imposed by either country due to Covid-19.
According to Wesgro, the Western Cape’s trade and investment promotion agency, the US was the province’s largest export market for the first time in 2021, with exports totalling close to R17bn, an increase of 57.5% on 2020’s value of R10.8bn, and a significant 88.5% higher than the R9bn recorded in 2019.
For the past decade, the US, the world’s largest economy, has also been the largest investor in the Western Cape, pumping in R7.3bn between 2020 and 2021.
Correction: April 19 2022
An earlier version of this story stated that the International Air Services Council, a government body that falls under the department of transport and is responsible for awarding or revoking traffic rights to airlines operating in SA, has acceded to Delta’s request. It is, in fact, the department of transport that makes determinations in respect of foreign airlines. Access is governed by the bilateral air transport agreements that are negotiated at a government-to-government level.
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