IATA urges partnership to drive aviation benefits in Southern Africa

The International Air Transport Association (IATA) unveiled a new study highlighting the importance of the aviation industry to the economy of South Africa. IATA urged a new partnership between government and the aviation industry to maximize the social and economic benefits that a safe, secure, efficient and environmentally responsible aviation industry can deliver.

“Last year 21 million people and 240,000 tonnes of freight travelled to, from and within South Africa. Aviation is a critical strategic component of the South African economy and indeed the economies of all states in Southern Africa. But this cannot be taken for granted. Positive policies are needed to drive aviation’s significant economic benefits,” said Tony Tyler, IATA’s Director General and CEO at the Annual General Meeting (AGM) and Conference of the Airlines Association of Southern Africa (AASA).

IATA partnered with Oxford Economics to assess the benefits of aviation with a goal of informing policy-makers what can be achieved in the broader economy with policies that support aviation’s critical mission to deliver global connectivity. Aviation directly contributes 2.1% to South Africa’s GDP (ZAR 51 billion) and 227,000 high productivity jobs. Including the benefits of tourism into the calculation adds a further ZAR 21 billion in economic activity and 116,000 jobs.

IATA’s outlook for aviation in Africa is aligned with a global outlook showing declining profitability.

“Global airline profits will fall to $4.9 billion in 2012 which is a margin of just 0.8%. African airlines will be the only region in the red, with a loss of $100 million. A strong partnership between government and industry across Southern Africa is needed to provide a solid foundation for success. Making the world a better place for airlines to do business drives economic growth and enriches nations with prosperity—both material and of the human spirit,” said Tyler.

Tyler outlined four elements for strengthening the foundations of a sustainable aviation industry: improving safety and security, providing cost-efficient infrastructure, and furthering environmental responsibility.,

Safety: “Safety is our top priority and Africa’s biggest challenge. Last year, the continent’s safety record was 12 times worse than the global average. World-class safety is possible in Africa. Twenty-four sub-Saharan African airlines are on the IATA Operational Safety Audit registry. Eighty percent of African accidents between 2008 and 2010 involved carriers not on the registry. IATA is committed to working in partnership with any airline or government that wants to improve safety with tools and best practices,” said Tyler. For example, IATA provided flight data analysis to nine airlines who agreed to make use of it, resulting in a 56% reduction in deviations from ideal flight trajectories.

Security: Tyler urged support for the Checkpoint of the Future. The Checkpoint of the Future is a vision for risk-based screening taking advantage of passenger data and evolving technology. “We are seeing great support for this vision from the US, the EU and other governments worldwide. We hope that the Southern African states will also sign on to the key principles for the Checkpoint,” said Tyler.

IATA emphasized its opposition to the development of “red lists” of states that cannot be trusted to participate in the global air transport system. “This is counter-productive and will isolate those states that most need the help of global standards,” said Tyler.

Infrastructure: Through Airports Corporation South Africa (ACSA) and Air Traffic and Navigation Services (ATNS), South Africa has world class infrastructure. “But the 161% increase in ACSA charges allowed over the next five years is a clear indication that there is much that must be reformed. If charges are increased in line with this allowance, South Africa could have the most expensive airports in the world. That is not sustainable and I am eager to engage in a positive dialogue on how we can move forward to make the air transport infrastructure more competitive,” said Tyler.

IATA urged three critical steps: (1) a review of ACSA capital expenditure—excluding some developments in Cape Town and Johannesburg from the 2013 pricing permission calculation and allocating the proceeds from the sale of the old Durban airport to pay down ACSA’s debt, (2) eliminating differential pricing between international and domestic services and cross-subsidization among airports, and (3) the development of a strong independent regulatory framework for both ACSA and ATNS which includes consultation with industry.

Environment: As host of the United Nations Framework Convention on Climate Change COP 17 talks in Durban next month, South Africa will be playing an important role in developing a global solution to the global problem of climate change. IATA urged South African support for aviation’s ambitious commitments: to improve fuel efficiency by 1.5% annually to 2020, cap net emissions from 2020 and cut net emissions in half by 2050 compared to 2005. “Aviation is responsible for 2% of global manmade carbon emissions. And we are a global industry with a global strategy to achieve serious emissions reductions in the coming decades,” said Tyler.

IATA urged African governments to keep focused on global solutions for aviation under the leadership of the International Civil Aviation Organization (ICAO). “We support and need positive economic measures to achieve our emissions reduction commitments. But a unilateral regional scheme implemented extra-territorially is not the way to go. We will need Africa’s support to stop Europe’s misguided approach to bringing aviation into the EU emissions trading scheme (ETS),” said Tyler.

Moreover IATA registered its concerns over South Africa’s plans to include aviation in its economy-wide carbon tax. “This will be a competitive disadvantage for South African carriers and add to double counting of emissions under conflicting measures including the EU ETS proposals as well as the environment-related departure taxes that are imposed in the UK, Germany, Austria and elsewhere. This is yet another reminder of why a global approach through ICAO is the way forward,” said Tyler.

Read Tony Tyler’s full speech