Aviation sector critical to the economy

 Successful state owned airlines’ critical success factors include clarity of mandate and a harmonised ‘Whole Of State’ aviation policy framework. Global air services drive almost all economic sectors, delivering trade, employment, tax revenues, job creation, skills development and a substantial direct and indirect contribution to Gross Domestic Product and, along with the catalytic demand impact on related sectors such as tourism, the importance of an aligned whole of state aviation policy in developing economies cannot be underestimated.

“SAA continues to answer its mandate vis-à-vis national development,” says the SAA Group’s Nico Bezuidenhout, “in South Africa alone the value of SAA extends well beyond its balance sheet with the airline functioning as a substantial economic enabler.” As measured by a recently commissioned Oxford Economics Study the group comprising SAA, SAA Technical, low cost airline Mango, SAA Cargo, Air Chefs and SA Travel Centre, collectively contributes 3,6 billion Rand through direct output to the South African economy, 4 billion indirectly through its supply chain and 1,6 billion Rand through spending employees and respective supply chains. In addition there are 12,4 billion Rand in catalytic benefits through tourism bringing a total contribution to the South African economy to 21,6 billion Rand.

“Equal to SAA’s contribution to GDP is the fact that the Group supports 34 000 jobs in South Africa,” says Bezuidenhout. “11 500 of these are directly supported by the Group while 16 400 jobs lie in the SAA supply chain and a further 6 300 jobs are supported through the spending of Group employees and its supply chain. The study shows a tourism benefit of a further 51 400 jobs as an effect from the two passenger airlines operated – SAA and Mango – carrying 6.2 million passengers and 144 275 tonnes of cargo during the past fiscal.” This is equivalent to 36 percent of all passenger traffic to, from and within South Africa.

Bezuidenhout believes that a sound policy framework is a critical success factor for a state owned airline and it allows the aviation sector optimise its economic contribution. “Infrastructure development such as airports, the growth of airlines, air traffic management and bilateral air service agreements among others must be optimised and efficiencies improved to facilitate the growth of a state’s aviation sector.”

“Increased growth will lead to a far greater catalytic contribution to domestic and continental GDP, job creation, skills development and tax base growth (VAT, income tax, aviation taxes etc). Examples outside South Africa, where ‘Whole Of State’ aviation policies have succeeded include Singapore, the United Arab Emirates and, closer to home, Ethiopia.”

This position was very much supported at the IATA (International Air Transportation Association) Annual General Meeting in Cape Town. Association Director General Tony Tyler noted the African opportunity. In a statement he noted that “Global connectivity – enabled by aviation – has a very powerful role to play in integrating the 54 national economies of Africa and connecting them to the world. With a few kilometres of tarmac, even the most remote destination becomes part of the global community.” African aviation already supports an estimated US$ 67 billion in economic activity annually and 6,7 million jobs.

Statement issued by SAA

Leave a Reply

Your email address will not be published. Required fields are marked *