E1.2 BILLION SPENT ON ESWATINI AIR

MBABANE – Taxpayers will inject an additional E395 million into Eswatini Air, bringing the total expenditure on the national carrier to over E1.2 billion over the past three years. This is reflected in Head 53 in the Budget Estimates for the next financial year  – the Ministry of Public Works and Transport. The national airline of the Kingdom of Eswatini is a strategic business unit within the Royal Eswatini National Airways Corporation (RENAC).

RENAC is under the Ministry of Public Works and Transport.  Parliament is yet to deliberate on the airline’s financials. Giving a brief background, in 2023, government allocated E476 million to the airline, followed by E335 million in 2024. It has been learnt that the latest financial plan earmarks another E395 million for the forthcoming financial year. Overall, government will spend over E600 million on the country’s aviation industry.

This includes more than E234 million allocated to the Eswatini Civil Aviation Authority (ESWACAA), which manages King Mswati III International Airport, Matsapha Airport, and the Nhlangano Airstrip.The substantial financial commitment highlights government’s determination to keep the airline operational despite ongoing financial losses. However, it raises concerns about whether the investment serves the best interests of the economy and taxpayers.

Vision

Eswatini Air, launched with the vision ‘Everyone must fly’, appears not to have fully realised its goal, as only a limited number of people are flying on its routes. The airline has received a mixed reception from travellers, with many questioning its sustainability. Between April and December 2023, government spent over E173 million to keep the airline running, yet revenue for the same period stood at just E27.9 million.

The financial report of the Royal Eswatini National Airways Corporation for the quarter ended September 30, 2024, revealed that 83 per cent of the airline’s operations rely on government funding, while only 17 per cent comes from actual business revenue. Despite these concerning figures, Eswatini Air continues to expand. Government ministries and private sector partnerships have helped improve passenger numbers on the Johannesburg route. Additionally, the introduction of shuttle services on October 30, 2024, aims to attract travellers who typically use road transport.

Plans to launch flights to Lusaka, Zambia, are also in place to strengthen the airline’s regional presence. Currently, Eswatini Air offers direct, non-stop flights between King Mswati III International Airport and Durban, Cape Town and Johannesburg in South Africa, as well as Harare, Zimbabwe. The airline recently announced its upcoming route to Lusaka. Is the Investment Justified? Over the past three years, taxpayers have funded Eswatini Air to the tune of E1.2 billion. Despite this heavy financial backing, the airline continues to struggle. In the current financial year alone, it received E390 million from government.

Yet, operational costs remain significantly higher than income, with expenses reportedly outpacing revenue by six times. Presenting the national budget for the 2025/2026 financial year on Friday, Neal Rijkenberg, the Minister for Finance, said the launch of the country’s only commercial airline is another milestone of the last two years and it has the potential to grow into a regional carrier. Rijkenberg said the new routes to Durban, Cape Town and Harare, Zimbabwe, continued to enhance regional connectivity, driving trade and tourism. In the reporting period (April 2024 to December 2024), he said the passenger traffic increased by 34 per cent, with 73 926 passengers compared to 56 281 in the same reporting period of the previous financial year.

Recognition

Rijkenberg said cargo volumes grew by 25 per cent. The minister mentioned in his budget speech that the recognition by the African Airlines Association is a reflection that the airline has made a mark in the aviation landscape in the sub-region. The minister said Eswatini signed four Bilateral Air Services Agreements (BASA) in 2024 to establish working relationships with other countries.“This provides the national airline with the opportunity to start cooperating with airlines from these countries and possibly start new routes,” he said. It is worth mentioning though that MPs, in 2022, raised concerns that the minister for Finance was not aware of the price of two aircraft bought by RENAC.

Records indicate that this happened during the portfolio committee debate of the Ministry of Finance’s annual performance report, where the MPs demanded answers on where the money to purchase the two aircraft came from. The minister made it clear though that he was in support of the purchase of the two aircraft and that they were purchased at a discounted price.
Siphocosini MP Mduduzi Matsebula, who is also the Minister for Health, was one of those who raised the issue, as he first asked to know how much RENAC received as subvention, since it had been explained that it was a public enterprise.

Matsebula said the amount received by RENAC as a subvention should be clearly stated as he wanted to understand what the public enterprise did with it. This is what he said at that time: “I am concerned because right now it looks like the public enterprise has a lot of money, such that it has purchased two aircraft. We should also be provided with answers whether the parastatal does submit audited financial statements.” He also questioned the scope of approval of the two aircraft and whether a feasibility study was conducted.
Matsebula asked to know if the legal procurement policies were followed prior to purchasing the aircraft.

“We want to know if we will get value for money in this and further ensure that the public purse is protected,” Matsebula submitted. Also raising the issue was Lobamba Lomdzala MP Marwick Khumalo and others. Giving his responses to the questions and concerns raised by the MPs, Rijkenberg first confessed that he was and continued to be in support of the purchase of the aircraft. This, he said, was because he believed in the commercialisation of RENAC. He disputed insinuations that the aircraft were bought for luxury.

“These are commercial aeroplanes. They were bought at a reasonable price but I still do not know the price, even though I know the overall budget,” he stated at that time. He explained that all necessary feasibility studies were conducted and presented to Cabinet, which then approved the purchase of the aircraft. The minister also informed the MPs that the money used to purchase the two aircraft came from savings the public enterprise had within its budget allocations.

Feasibility

“I understand the concerns and I agree that these aircraft might not make money, but if the feasibility studies are anything to go by, then money will be made,” said the minister. Explaining further, the minister stated that there was a bigger economic benefit of having a commercial aircraft. He said the bigger picture of the purchase would be seen in the investments that were being explored in various sectors, including tourism. Rijkenberg said the country had already invested in the construction of the International Convention Centre (ICC) and was on the verge of introducing a game reserve in the Lubombo Region and that all the projects aligned with the need to have commercial airspace.

Meanwhile, it is understood that Eswatini Air’s struggles mirror broader challenges in the African aviation sector, where most airlines contend with high operating costs, fluctuating passenger demand, and stiff competition from larger, well-established carriers. Key difficulties include:

Brand Recognition and Customer Loyalty: As a new entrant, Eswatini Air is still working to establish itself in a competitive market.
l     Regulatory complexities: Regional differences in aviation regulations create operational hurdles.

l     Tough competition: Larger, long-established airlines dominate the market.

l     Economic instability and rising fuel costs: External economic factors add further volatility.

The dissolution of Eswatini Airlink in June 2022—the previous joint venture airline—serves as a reminder of the precariousness of the airline industry and the challenges involved in sustaining a national carrier. Eswatini Air aims to achieve financial stability within three years by focusing on underserved regional markets to increase passenger numbers and revenue. However, its track record suggests that profitability remains uncertain. Government’s ongoing financial commitment raises serious concerns. With the majority of the airline’s funding coming from State coffers rather than passengers, the question remains: Can Eswatini Air transform into a self-sustaining business, or will it remain dependent on heavy public subsidies?

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