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Monday, 19 November 2012

Intellectual Poverty (David Phiri)

Government obsession with establishing a national airline continues. Tourism D Minister David Phiri says the tourism sector would not progress without one :
The question of connectivity is a central factor in the development of Zambia’s tourism sector. This can only come about where there is a viable national airline. There is consensus in both Government and industry that Zambia needs a viable national airline..
This is economic folly. How is a national airline going to improve connectivity? Basic transport economics suggest that the reason we have limited connectivity from/to Zambia can only be down to three things : (i) poor passenger demand on certain routes; (ii) limited runaway capacity; and, (iii) regulatory constraints. The big one there is passenger demand. If there's long haul passenger demand many airlines will gladly put on the flights. But one thing is certainly true : supply won't create demand. 

As things stand there's insufficient demand on long haul routes to run a profitable airline. At present key destinations are already serviced. Where does Mr Phiri think there's demand gap that's yearning to be filled by tourists? His he planning to fly directly to the USA? All tourists coming to Zambia now have options with BA, KLM and Emirates. Where exactly are is hoping to fly this new airline to make money in tourism? Unless Mr Phiri expects the new government airline would run empty and subsidised routes - all paid by taxes of poor Zambians who will never dream of flying abroad!

1 comment:

  1. "supply won't create demand"

    Truer words are seldom spoken... not to say that's going to stop anyone from trying!

    ReplyDelete

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