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National Gazette No. 40847, 19 May 2017, Vol 623, Page 427

20170519 - National Gazette No 40847 of 19-May-2017, Volume 623, page 427

Page	427 of 556
Gazette	National Gazettes, No 40847, from 19 May, 2017
Department	Transport
Notice	Page No. 97 of 180, Notice No. 401, White Paper on National Civil Aviation Policy 2017 » Department of Transport » Official publication for general Information

STAATSKOERANT, 19 MEI 2017                       No. 40847    427

Code-sharing
                     South Africa currently has an interim policy for dealing with code-sharing.      In
                     practice, provision is made for code-sharing within the bilateral framework to ensure
                     reciprocal benefits. Airlines then negotiate the commercial arrangements among
                     themselves.    In the domestic market, code-sharing is not commonly practised
                     between domestic airlines, other than airlines within the same `stable' (e.g. SAA
                     and Mango on the Cape Town - Durban; Cape Town - Bloemfontein; Cape Town -
                     Port Elizabeth; and Johannesburg - George routes). This is probably due to the
                     highly competitive nature of the deregulated domestic market. Code-sharing is
                     permitted and widely practised by domestic airlines in commercial co-operation with
                     foreign airlines.  In these cases, the South African-based airline operates the
                     service and the foreign airline shares this capacity (i.e., seats / capacity marketed
                     under its own brand).     The emerging trend of inter-modal code-sharing (e.g.
                     between air and high-speed rail) is not yet evident in the South African market.

Franchising
                     Franchising occurs when one airline (the franchiser) grants another airline (the
                     franchisee) a franchise, or right, to use elements of its corporate identity, such as
                     livery and marketing symbols. This means that in a franchise, the airline supplying
                     aircraft and staff (the franchisee) takes the risk of selling the seats, even though
                     they are sold under the name of another airline (the franchiser). Unlike code -
                     sharing which involves the rationalisation of equipment, franchising involves the use
                     of intellectual property.
                        Aircraft leasing

There has been a growing increase in the practice of aircraft leasing in air transport,
                     where a carrier rents an aircraft from another carrier or other entities to provide
                     commercial air transport. Leases generally take the form of a "dry" lease (lease of
                     aircraft without crew) or "wet" lease (lease of aircraft with crew). The practice of
                     leasing may raise potential safety and economic issues in cases where the leased
                     aircraft is registered in a different State from that of the operator.
                  Global Alliances such as Star and OneWorld have emerged using these cooperative
                  arrangements, and have introduced increased complexity and concerns about
                  transparency.

(b) Issue

Certain co-operative arrangements involve more than simple marketing or operating
                  issues, and therefore consumer and competition issues need to be addressed.

Currently the South African industry lease-in as well as leases-out aircraft for use by
                  domestic carriers and foreign-based carriers respectively. In both cases, responsibility
                  for compliance with minimum safety standards needs to be ensured.

< page 426	View full Gazette No. 40847	page 428 >

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