DURBAN AIRPORT BUILDS BRIDGES IN THE AIR
WORDS: SHIRLEY LE GUERN
With Durban still reeling from the April 2022 floods and large parts the area in and around the old airport site barely operational due to infrastructural damage, one shudders to think what would have happened to the city had the provincial government not forged ahead with its controversial decision to relocate the airport northwards to La Mercy during the late nineties.
Heated arguments and a court case that was vehemently defended by the Airports Company of South Africa (ACSA) followed. It was believed that the then R1.6-billion airport relocation should wait until 2020 when passenger volumes would reach more appropriate levels.
We’ll never know whether it would have been aircraft or related equipment sailing down the highway rather than massive shipping containers that shocked observers during the April floods. What we do know is that the air force base that was needed for rescue operations was severely damaged.
Over the past 10 years or so, the coveted airport site has been purchased from ACSA by Transnet for construction of the mega Durban Dig Out port. When that project was scuppered, the site was leased to tenants, including neighbouring Toyota which took severe damage during the heavy rains.
It has been marked as the site for the development of an automotive hub that would facilitate just-in-time supplies for Toyota’s expansion plans. But now seen as a high risk zone with potentially massive insurance costs for future investors and flanked by an oil refinery that is shutting down local production in the near future, its actual future remains murky.
Right now, the airport that opened its doors to the general public on 1 May 2010 (a month before the 2010 FIFA World Cup) is flying – all puns intended.
Although it took a hit from Covid travel bans which halted international and even domestic flights and tipped many airlines into liquidation, it has recovered to the point where, by March this year, King Shaka International Airport (KSI) was the fastest recovering international airport in the country, achieving 49% of its pre-Covid passenger throughput by March.
Cargo volumes were also steadily climbing.
The airport that was built on a small sugar cane plantation populated by a house and a wooden, microlight hangar, is now one of very few positive stories on the province’s beleaguered economic horizon and is now seen as a major engine for growth in the region. Within the next two years, the surrounding economic zone – known as the Dube TradePort (DTP) expects to achieve well over R5 billion in new investment.
Planned well and built using latest construction methodologies, flood damage was almost non-existent. DTP was also one of the co-called survivors of looting which devastated businesses in the city’s major economic zones in 2021 – facts that are likely to keep potential investors looking northwards.
DTP CEO, Hamish Erskine, told Out&About a short while ago that they would continue to support ACSA in attracting and restoring more and more direct flights to KSI. The announcement of a new direct flight between Harare and Durban by Airlink followed as did the recent return of Turkish Airlines.
TAKE OFF - THE BIGGER PICTURE
Much has been said about the port of Durban being a hub for the transportation of goods into both the Southern African Development Community (SADC) and the rest of Africa. But the port has been dogged by problems rather than boosted by development.
With the opening up of the African Union, there is no reason why KSI, supported by high value goods manufacturers located in the surrounding DTP special economic zone, could not play a similar role.
To quote an International Air Transport Association (IATA) report on the importance of air transport in South Africa which was completed just before the Covid lockdown: “air transport generates benefits to consumers and the wider economy by providing speedy connections between cities. These virtual bridges in the air enable the economic flows of goods, investments, people and ideas that are the fundamental drivers of economic growth.”
Speaking after the touchdown of Airlink’s first Harare Durban flight, ACSA’s Regional General Manager, Nkosinathi Myatasa, echoed this. “To ensure our sustainability and agility in a constantly changing business environment, we embarked on a recover and sustain strategy … This includes the promotion of regionalisation and clustering of the airport network providing pooled resources and air access to previously less serviced markets, building of provincial networks that feed into major South African airports, the SADC region, the African continent and the rest of the world and, at local level, enhancing the accessibility of airports and the airport economy for local communities.
Airlink chief executive and managing director, Rodger Foster, also underlined the importance of a bigger vision. He pointed out that Airlink, along with other airlines, saw supply chain systems facing an existential crisis. When coupled with the woes of its partners SAA, it faced a “double whammy”.
“Others in our position may well have thrown in the towel, but we have never lost faith in South Africa, the SADC region or the resilience of everyone who lives here,” he said.
Today, Airlink’s fleet serves over 45 destinations across southern and eastern Africa reaching as far afield as St Helena and the Ascension Island in the South Atlantic. The airline also competes on some of South Africa’s main domestic travel routes.
Speaking at AviaDev Africa 2022, which was held in Cape Town in June, Durban Direct, a multi-entity and departmental committee dedicated to driving the coordination and promotion of local and international air services into KSI through the provinces Route Development Committee, said last week that it had set its sights on taking this even further.
“Providing seamless air connectivity with the rest of our neighbouring countries is a priority for us as it enables businesses to attract investment and spurs tourism. We have noted that a growing number of manufacturers who have chosen to set up new operations within DTP’s Special Economic Zone have plans to grow their production capacity to focus on export markets in the rest of Africa,” said Erskine who is not only CEO at DTP but also the co-chair of Durban Direct.
Ricardo Isaac, Senior Manager, Cargo Development and Operations, at Dube Cargo Terminal and a member of Durban Direct, continued: “We have found that coordinating the formation of strategic partnerships with airlines, regional airport operators, freight forwarders and tourism authorities is instrumental in growing sustainable air services into Durban… The aim is to explore ways we can potentially grow these traffic volumes between our destinations in order to make it viable for the introduction of a direct route.”
Although building new routes by tapping unserved connections requires a broad buy-in to support route development from both the public and private sector and takes a long time to get right, it offers strong growth potential.
But the extent to which just a small slice of the global or even African airline market can contribute to the regional economy is probably best outlined by the IATA’s economics report.
Prior to the pandemic, IATA estimated that airlines, airport operators, airport on-site enterprises (restaurants and retail), aircraft manufacturers, and air navigation service providers employed 70 000 people in South Africa.
In addition, by buying goods and services from local suppliers, the sector supported another 113 000 jobs. On top of this, the sector supported an estimated 48 000 jobs through wages paid t employees which were subsequently spent on consumer goods and services. Foreign tourists arriving by air to South Africa, were estimated to support an additional 241 000 jobs.
The same report noted that the air transport industry, including airlines and supply chains, contributed an estimated to support US $5.2 billion to South Africa’s GDP.
Although South Africa’s ports were not rated very highly amongst international seafarers, according to IATA, South Africa’s facilitation of air cargo did. The Air Trade Facilitation Index (ATFI) ranked South Africa 41st out of 124 countries as well as 9th out of 135 countries in terms of the eFreight Friendliness Index (EFFI). The Enabling Trade Index (ETI) ranked South Africa 55th out of 136 countries globally for the facilitation of the free flow of goods over borders and to their destinations.
Back then, the air transport market in South Africa was forecast to grow by 102% in the next 20 years. This would result in an additional 21.4 million passenger journeys by 2037. If met, this increased demand would support approximately US $19.1 billion of GDP and almost 797,410 jobs.
That suggests not only what was lost to Covid but also what could still be achieved a little further down the line.
More recently , IATA has reported an increase in travel momentum in the wake of reduced Covid-19 travel restrictions. This, too, bodes well for air cargo as traditionally at least 50% is transported in the bellies of passenger planes. The outbreak of Covid-19 saw 75% of this airfreight capacity removed from the market – but more and more planes are taking to the skies.
FLYING CLOSER TO HOME
Although Erskine believes that the greatest achievement has been taking the infrastructure build ahead of the relocation of the airport between 2007 and 2010 and commercializing and operationalizing as a genuine hub for investment and business on a number of different levels in KZN, he is also aware that there’s still a lot more to come.
“If you are going to spend that amount of tax payers’ money to do a relocation, you have to make sure that it impacts on the maximum number of areas of the economy so that you optimize the investment. That was always the plan behind it.
“The masterplan itself was completed well in advance between 2004 to 2006 to do exactly that – to spatially plan given that we had this wonderful greenfields site of 2000 hectares. We were able to envisage a whole new approach. Nowadays, many airports around the world wish they had the opportunity to do that,” he commented.
Erskine believes that the blurring of the lines of where KSI stops and the DTP starts is largely to do with the fact that, worldwide, airports and air services make up a key component of the overall logistics manufacturing trade and property development component of an economy as part of what’s known as multi modalism – which is sea air road and rail.
The fact that Durban was also the second largest manufacturing centre and the largest trade centre in South Africa took this to the next level and was an important part of the original masterplan.
“For the first time, we were going to take a very unique and specific focus on air cargo and provide the highest quality environment for managing and developing air cargo. That hadn’t really happened in SA airports previously. So, that was a conscious decision and an agreement we reached in 2006.
Essentially, the development of KSI was a combination of a new airport, new cargo terminal and a trade zone which could not be separated out. By creating sufficient space for the air cargo industry to not only operate but also grow as well as ensuring there was a single point of activity for the air cargo industry, the province has attracted upwards of R3-billion in manufacturing investment with the majority of it coming from the private sector.
“We agreed that we would develop the cargo terminal because that wasn’t really a core business of ACSA’s at the time. We would develop this with a view to creating world class infrastructure. Secondly, we would then create zones, industrial zones in proximity to that cargo terminal that would be able to support not only the air cargo industry and the logistics industry but also high value manufacturers and bring manufacturing close to a port of entry and exit,” Erskine recalled.
He said that the focus was inevitably on high value goods and manufacturing as they tended to have a higher usage of air freight and benefited more from the proximity to the cargo terminal.
This approach started with making sure that sufficient industrial land was available and that the airport would not be a once off with a down the line discovery that they were squeezed for land to develop further.
“The exciting part is that we have completely filled the first zone. Now, we are well into our second phase and we have signed investment deals. In the next two years, we expect to achieve well over R5 billion or more worth of new investment in that second zone.”
But it hasn’t been ‘plane sailing’- all puns intended. Covid put the brakes on fairly substantial year on year growth in cargo volumes.
“Cargo is carried on aircraft and the hard lockdown stopped all flying. So, for a long part of Covid, we literally had no cargo. That business got hit very hard. But, again, some very positive signs of recovery are now coming through,” he explained.
Qatar Airlines returned as soon as it could after lockdown, allowing DTP to maintain international cargo connectivity. They’ve since been joined by Emirates and then Turkish Airlines in June.
But more rebuilding needs to be done.
Prior to Covid, the most lucrative international route was the British Airlines direct flight between Durban and London. This, quite literally, remains up in the air right now. Efforts are being made to re-instate it.
“We’ve used every minute of Covid to plan for the future, to prepare, to make sure that we are ready and I think we are very much getting the benefit of that planning already,” says Erskine
MORE LINKS IN THE SUPPLY CHAIN
Essentially every international plane that lands symbolizes a link to another economy, according to Erskine.
In addition to carrying tourists, business people and even crew for ships in the harbor, there is also valuable cargo in the belly of that aircraft that goes into manufacturing processes. These are usually high value goods that are critical to the regional and national economies. When that plane leaves, it takes with it manufactured goods that equate to export revenue. In short, it’s a vital lifeline for Durban.
“Not every city in the world has the kind of mixed economy that we have in Durban and has a big enough population to sustain hub routes like those operated by Emirates, Qatar and Turkish Airlines. They provide one-stop onward connections to hundreds of destinations around the world. Not every city can sustain those kind of routes and Durban is very fortunate that it can,” he noted.
These hub routes mean that international tourists have a wider range of onward destinations that can be serviced out of Durban. When an Emirates flight reaches Dubai, its Durban passengers go to a number of different onward destinations. Hubs like Istanbul, for example, offer significant connectivity into Europe.
“So, air services are something you have to nurture and maintain. If you don’t have them, you really become a secondary city to Joburg and you end up just feeding domestic networks which doesn’t give you the efficiency that you need. For example, conferencing, tourism, all of these things are much harder to do if you do not have that direct connectivity,” he continued.
The importance of key linkages also applies regionally. “For us, as we grow trade into the region and the continent, our SADC region connectivity will drive that same set of positives – business, commerce, tourism and cargo,” Erskine said.
Examples of these routes include Harare, Lusaka, Gaborone, Maputo and Mauritius. From having no flights between Durban and Mauritius four years ago, this was about to be a seven day a week service just prior to the onset of the pandemic. It will be important to re-instate that, too.
Looking back Erskine knows that what has been achieved and what still needs to be done hinges on that much debated decision to relocate the Durban airport in the first place.
“The key was having the infrastructure to service airlines – something that the old airport was never going to be able to do. It was always going to be a small domestic operation, so it was a non-starter. If you genuinely look at the numbers and the impact so far, you can’t say anything other than that the relocation and the development of King Shaka Airport has been unquestionably a success for Durban and for KZN,” he pointed out.
