Exchange Rate and aviation in South Africa?!
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Exchange Rate and aviation in South Africa?!
The current strengthening Rand is thought to be good for aviation in South Africa. Certainly it does not make any sense to export an aircraft and should the Rand fall or stay where it is, then it makes sense to buy right now. The US market is very depressed and aircraft can be had cheaply for those who have the cash.
Tourism to the country is not as cheap as it was six months ago and the guys out there on contract have for once taken a salary decrease (Guns!!??) as opposed to the daily increase that they have enjoyed over the last few years.
The only folk enjoying the current state of affairs are the importers and those South Africans touring overseas who have more to spend. What is the effect on aviation locally? Fuel prices are still high, Iraq war is blamed for that, training costs horrendous. Where to from here?
Tourism to the country is not as cheap as it was six months ago and the guys out there on contract have for once taken a salary decrease (Guns!!??) as opposed to the daily increase that they have enjoyed over the last few years.
The only folk enjoying the current state of affairs are the importers and those South Africans touring overseas who have more to spend. What is the effect on aviation locally? Fuel prices are still high, Iraq war is blamed for that, training costs horrendous. Where to from here?
Gatvol
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Rand today at 7.28/ on the dollar. Its time my friends in South Africa can now afford to visit me. Rand was 11/1 while I was there last year. I say enjoy it while you can, it may also be time to get some Bank Accounts outside SA for the escape fund. In Pretoria I see nothing but more Construction which is also good......However on the Dark Side, the total lack of Law Enforcement , Corruption and Government Mandates on the "New Minority" is going to make things turn for the worse again soon. It just takes time.
As to tourism I have always said SA is the biggest secret in the world. Such a beautiful place. Again without any Law Enforcement that should really put an end to any significant travel to that part of the world.
Its going to take some drastic measures to turn the course of events around. I shall not elaborate on that.
As to the topic of Aviation, it is now the time for Aircraft purchases here. I drove passed one of the high desert "Boneyards " the other day (Mohave California) and I have not seen that many aircraft there in my lifetime. Just about every major Carrier in the world has Aircraft stored there including Swissair. Im betting no less than 200 of 727,737,747, MD 80s, DC10s etc types. Yet I cant get cheap airfare and all flights are full. Life is certainly a mystery sometimes.
As to tourism I have always said SA is the biggest secret in the world. Such a beautiful place. Again without any Law Enforcement that should really put an end to any significant travel to that part of the world.
Its going to take some drastic measures to turn the course of events around. I shall not elaborate on that.
As to the topic of Aviation, it is now the time for Aircraft purchases here. I drove passed one of the high desert "Boneyards " the other day (Mohave California) and I have not seen that many aircraft there in my lifetime. Just about every major Carrier in the world has Aircraft stored there including Swissair. Im betting no less than 200 of 727,737,747, MD 80s, DC10s etc types. Yet I cant get cheap airfare and all flights are full. Life is certainly a mystery sometimes.
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I heard on the BBC news yesterday that OPEC were holding talks as they were frightened that now that the war was over the price of oil was going to fall too quickly. Certainly since the war is now seemingly over petrol prices have fallen in Britain.
It is with slight bemusement I watch the Rand move into the heady heights in value against the £ and $ but I think interest rates are about 16% where as over in the UK it is 3.75%. Later in the year if rates go up in the UK and down in SA as seems to be likely, I'm sure the Rand will go down in value again probably not as much as before though.
As far as struggling airlines are concerned in the last 3 years I must have made about 20 journeys between the UK and SA and all flights were over booked.
It is with slight bemusement I watch the Rand move into the heady heights in value against the £ and $ but I think interest rates are about 16% where as over in the UK it is 3.75%. Later in the year if rates go up in the UK and down in SA as seems to be likely, I'm sure the Rand will go down in value again probably not as much as before though.
As far as struggling airlines are concerned in the last 3 years I must have made about 20 journeys between the UK and SA and all flights were over booked.
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Rand vs Dollar
This being an aviation forum, I must stop myself from moving off the point. Aviation has grown in SA as a result of folk taking advantage of a Dollar based asset, being moveable etc. Some tax breaks were applicable and still are, so aviation grew quite nicely. When the Rand initially fell some years back, you battled to file a flightplan out of SA due to congestion of all the aircraft being exported. Not good for the industry!
At the moment there is nobody benefitting from the strong Rand, certainly not the man in the street because prices have not come down at all. These were the same prices that went up every time the Rand weakened against the Dollar! Industry in general is suffering and exporters who employ many 'previously disadvantaged individuals' are facing closure.
Aviation is trying to cope with the slump which is global, post 9/11 and now the SARS epidemic killing the lucrative Far East market. Flights are full, wherever you travel yet losses have never been greater and many airlines are facing closure!
It is a tough enough business to get started in as it is without the latest curved balls being bowled.
At the moment there is nobody benefitting from the strong Rand, certainly not the man in the street because prices have not come down at all. These were the same prices that went up every time the Rand weakened against the Dollar! Industry in general is suffering and exporters who employ many 'previously disadvantaged individuals' are facing closure.
Aviation is trying to cope with the slump which is global, post 9/11 and now the SARS epidemic killing the lucrative Far East market. Flights are full, wherever you travel yet losses have never been greater and many airlines are facing closure!
It is a tough enough business to get started in as it is without the latest curved balls being bowled.
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Let's not start discussing this very depressing topic.
Us "poor" sods who work in the bush and earn $$'s have taken a 20% pay cut since January.
It's good for the country though, so I guess we have to put up with it. My $$'s wont get me as many hours on the rental Arrow as I budgeted for during my holiday in May, but then again, if I wasn't working out here I wouldn't have been able to fly at all, let alone hire a plane to go gallavanting for two weeks!
Long live African Aviation. I love reading all the posts.
Us "poor" sods who work in the bush and earn $$'s have taken a 20% pay cut since January.
It's good for the country though, so I guess we have to put up with it. My $$'s wont get me as many hours on the rental Arrow as I budgeted for during my holiday in May, but then again, if I wasn't working out here I wouldn't have been able to fly at all, let alone hire a plane to go gallavanting for two weeks!
Long live African Aviation. I love reading all the posts.
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Speaking from a different perspective here - a guy who has chosen to do his PPL in SA at the end of the year. Been planning this for over a year and have seen the prices go up 43% is making me cry - but not rule out the idea in favour of the USA - yet
I too am astounded the rand has continued to strengthen, I would have thought > war ends, oil prices drop, gold prices drop and rand decreases in value. Not yet any way. Sorry if I am being selfish here, I'm sure for the economy its good.
Hope to be there soon......keep up the posts!
Wingz
I too am astounded the rand has continued to strengthen, I would have thought > war ends, oil prices drop, gold prices drop and rand decreases in value. Not yet any way. Sorry if I am being selfish here, I'm sure for the economy its good.
Hope to be there soon......keep up the posts!
Wingz
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Cdb,
Welcome to PPrune chum. Very true about the pay cut in $'s. Best way out is to earn ZAR's and $'s. Sort of covers you slightly but not completely.
Wingz,
I'm sure you'll still find it cheaper out this way in a while. The ZAR cannot continue strengthening the way it is and has to stabilize somewhere. We are expecting quite a dramatic drop in fuel prices soon. That may help a moer of a lot with the local cost of living as well if everybody playes ball. Lets all hope for the best.
Welcome to PPrune chum. Very true about the pay cut in $'s
. Best way out is to earn ZAR's and $'s. Sort of covers you slightly but not completely.Wingz,
I'm sure you'll still find it cheaper out this way in a while. The ZAR cannot continue strengthening the way it is and has to stabilize somewhere. We are expecting quite a dramatic drop in fuel prices soon. That may help a moer of a lot with the local cost of living as well if everybody playes ball. Lets all hope for the best.
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Rand/$
The main reason fro the strong rand is that the interest rate in SA is in the region of 14% (depending if you borrow or lend - 11% to 17%). Non SA people are borrowing in their countries at say4% and sending the cash to SA resulting in a huge demand for Rand.
The monetary committe of the SA Reserve Bank is meeting in June and will no doubt reduce interest rates which will result in cash flowing out of the country and the Rand weakening - so hold tight
The monetary committe of the SA Reserve Bank is meeting in June and will no doubt reduce interest rates which will result in cash flowing out of the country and the Rand weakening - so hold tight
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Forum
If you ahve SA specific questions you should post them in the forum at www.aeropages.co.za and get a varied local response.
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SALARIES TAKING A KNOCK !!
There have been some strong rumours that the receiver is now going to tax S+ts,regardless of the amount(previously only taxed above $120)
Does anyone know where this comes from and if so how they will do it.
With the exchage rate and taxation it is going to be pretty rough on us contract dogs !!
There have been some strong rumours that the receiver is now going to tax S+ts,regardless of the amount(previously only taxed above $120)
Does anyone know where this comes from and if so how they will do it.
With the exchage rate and taxation it is going to be pretty rough on us contract dogs !!
