South African aviation activity declines in first quarter of 2019

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Aviation activity dropped in the first quarter of 2019 after strong growth in the last quarter of 2018, according to the latest Aviation Activity Index released by the Commercial Aviation Association of Southern Africa (CAASA).

The CAASA Aviation Activity Index (CAAI) is based on 25 different indicators and provides a balanced gauge of economic activity in the commercial aviation industry. In the first quarter of 2019, the Index stood at around 108, compared to the 129 in the last quarter of 2019, but more or less in line with the first three quarters of last year.

CAASA said that compared to the fourth quarter of 2018, the index value recorded a decline, but remained virtually constant on a year-on-year basis. In the process, the index trend seems to have stabilised, after a declining trend that commenced in 2016.

The best performers during the first quarter of 2019 were exports of non-powered aircraft and the air traffic movements (ATMs) at a number of key private airports. Exports of non-powered aircraft have increased sharply over the past five years, mainly due to the continued expansion of the drone industry, CAASA said.

The exports of aircraft with an unladen mass of between two and fifteen tonnes recorded a healthy increase in the first quarter, whilst the imports of propellers also fared well (compared to the previous quarter).

The declining trend in air traffic movements (ATMs) at two airports managed by the Airports Company of South Africa (ACSA), namely Port Elizabeth and East London, remains a point of concern, particularly due to the abundance of tourism facilities in their surrounding areas. Compared to the average ATMs for the first quarter of every year since 2014, Port Elizabeth airport has declined by 24%, whilst East London airport shows a decline of 21%.

In sharp contrast, Rand airport has increased its first quarter ATMs by more than 10% since 2014 and now boasts the second largest level of ATMs in the country, higher than Cape Town International airport, which is in third place (OR Tambo remains comfortably in position number one).

Zero growth since 2014 in ATMs at the larger ACSA airports clearly indicates that inbound tourism from overseas has not yet fully recovered from the ill-conceived stricter visa regulations that were implemented during Mr Malusi Gigaba’s term of office as Home Affairs Minister, CAASA said.

Reasons for the generally subdued levels of activity in commercial aviation since 2016 include lethargic economic growth, low levels of investor confidence, policy uncertainty, high interest rates, higher fuel prices (until recently), and the effect of a volatile and undervalued currency.

“Combined with the lingering threat of land expropriation without compensation (EWC), this has not been conducive to investment in new productive capacity – a problem that exists in most of the country’s economic sectors, as confirmed by a consistent declining trend in real capital formation. Hopefully, the reforms aimed at improving growth that have been promised by the country’s new president, will start to bear fruit after the May elections,” CAASA said.



“Looking into the future, it seems that the aviation industry has already started to respond positively to the new policy emphasis on lifting South Africa’s economic growth rate. ATMs for the second quarter of 2019 at the country’s largest non-ACSA airports have increased quite dramatically from the first quarter, with five of them (Rand, Lanseria, Grand Central, Nelspruit and Pietermaritzburg) recording double-digit growth rates over the first quarter.”