Aviation activity increased sharply in the fourth quarter of 2018, driven by helicopter exports, 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 last quarter of 2018 the index rose to a level of 142, which is a 42% increase over the base period for the index in the first quarter of 2014. The first three quarters of 2018 were flat, with the index staying well below 115.
CAASA said a strong rise in the value of helicopter exports represented the main reason for the welcome recovery of the CAAI. Both categories (mass of below 2 tonnes and mass above 2 tonnes) recorded record high export values.
“A second contributing factor to the stellar performance of the CAAI during the 4th quarter of 2018 was strong growth in import values for aeroplanes and helicopters. An encouraging feature of the latest CAAI is the broad-based nature of recovery of commercial aviation activity, with a total of 16 of the 25 different indicators recording gains over the 4th quarter of 2017,” CAASA said.
The Index is not all good news, with the declining trend in air traffic movements (ATMs) at two ACSA airports, namely Port Elizabeth and East London, “a point of concern”, particularly due to the abundance of tourism facilities in their surrounding areas. “Combined with low growth in ATMs at the larger ACSA airports, it is clear that inbound tourism from overseas has not yet recovered from the ill-conceived stricter visa regulations that were implemented during Mr Malusi Gigaba’s term of office as Home Affairs Minister.”
CAASA urged that care should be taken with the interpretation of the CAAI results. “Commercial aviation activity in South Africa has suffered the same fate as several other sectors of the economy over the past two years, namely insufficient demand, flowing from lethargic economic growth and low levels of business and consumer confidence.
“Other reasons for the generally subdued levels of activity in commercial aviation since 2017 include 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.”
Since recording figures from 2014, the CAAI reached a high of 165 in the first quarter of 2016 but has dropped since then. At present it is the highest since the last quarter of 2016.