Program Director, Mr Cyrus Rogers
Mr Tony Tyler, Director-General, IATA
Chris Zweigenthal, CEO, AASA
Dr Elijah Chingosho, Secretary-General, AFRAA
Chris Hart: Chief Economist, Investment Solutions
Distinguished guests
Members of the media
Ladies and gentlemen
It is my pleasure to address this annual gathering of the delegates who are the heart of the delivery of aviation services in our country. We also welcome the international delegates to our country and wish all of you a wonderful stay in South Africa this weekend and beyond.
I would like to start by tendering an apology on behalf of the Minister of Transport Mr Sibusiso Ndebele who would like to have delivered an address to this gathering but is engaged this morning in an urgent meeting called by the President of the Republic Mr Jacob Zuma.
As you will also be aware, the Department of Transport is rolling out a number of activities which are part of the annual October Transport Month which the Minister has to attend to personally until 31 October.
Ladies and Gentlemen, only last week we hosted the SADC Ministers of Transport and Meteorology in Pretoria. Among other issues we discussed for endorsement by the Ministers of Transport in the SADC region was the promotion of safe skies and the regularisation of bilateral agreements which include collaboration on a number of issues between and among our countries.
We also hold this gathering ahead of COP17 meeting which will be held in this city towards the end of November. These meetings have a significant bearing on your annual conference this weekend and we are aware you will be deliberating on some of these key issues which will affect the aviation industry going forward.
On 25 July this year, we hosted the Pan African Aviation conference which was targeted at high-level and senior managers from States Civil Aviation Administrations, Air Navigation Services Providers, Airlines, Airports Operators, Ground Handling Services, Maintenance Organisations, Regional and International Organisations and Training Institutions.
The July Conference was attended by aviation experts representing the majority of the African continent and the international aviation institutions from around the globe including member states and bodies such as the United Kingdom, the United States of America, India, African Civil Aviation Commission (AFCAC), Airports Council International (ACI/Africa) the Agency for Air Navigation Safety in Africa and Madagascar (ASECNA) and the International Civil Aviation Organisation (ICAO).
The conference reviewed the status of the implementation of the action plan adopted by the Second Pan-African Aviation Training Coordination Conference held in Cairo, Egypt from 22 to 24 June 2010.
Amongst other issues, the conference deliberated on the following:
- Promoting a common African aviation training accreditation system recognised around the world
- Harmonisation and standardisation of training programmes throughout Africa.
- Assessing progress made in the development of the Association of Training Organisations, Centres of Excellence, Training Advisory Board and Regional Training Policy and requirements and improvement of affordable, accessible and quality training programmes.
The conference was seen as a positive step towards harmonisation of aviation training within the continent and its outcomes will go a long way in supporting the Department of Transport's skills development and growth plan. As we express our clear intervention in improving the industry, the Government of South Africa is well aware of the many challenges facing the airline industry and is keen on coming up with policies and interventions aimed at alleviating some of these challenges.
The challenges in the airline industry are not only faced by South African Airlines, but by airlines throughout the Continent. At their meeting held in Centurion on the 7th of this month, the SADC Ministers of Transport acknowledged some of these challenges and made a commitment, through resolutions, to have these challenges addressed.
The issue of the unilateral imposition of the Emissions Trading Scheme by the EU is one such challenge. The Ministers unanimously agreed to the opposition of the imposition by the EU and resolved that the SADC States would oppose this, and that the solution to the challenge posed by Emission cannot be a unilateral one, but that all ICAO Member States should come together and formulate a common approach, as this is a worldwide challenge.
To that end, South Africa has, jointly with other countries, adopted a declaration in opposition of the pending inclusion of the international aviation on the EU-ETS. There was also an endeavor by the National Treasury to impose carbon tax on aviation.
As the Department of Transport, we objected the inclusion of aviation in the imposition of carbon taxes. We managed to get assurance from the National Treasury that Aviation will be excluded. South Africa views the issue of climate change in a serious light and it is for this reason that we are involved in many fora, which are dealing with climate change issues, represented by individuals from various disciplines, including aviation.
South Africa has also been invited, by ICAO, to participate in a workshop on "A vision for the sustainability of alternative fuels for aviation". South Africa has also been invited to be a panelist on this workshop, and this is a sign of the confidence that the world out there has on South Africa's involvement in issues affecting climate change.
Our involvement in these fora is aimed at ensuring that the resolutions coming out of these fora assist in curbing the damage caused by climate change, but at the same time ensure that such resolutions do not hamper the development of the aviation industry, which is one of the Government's main objectives.
Whilst on the issue of climate change, let me take this opportunity to encourage you all to participate in the COP 17, which is scheduled to take place here on our shores, from 28 November to 9 December this year, in Durban. The global economic downturn has meant that fewer people travelled by air and thereby resulting in lower profit margins for the airlines.
This also resulted in entities relying on user charges, such as the Civil Aviation Authority, getting less income, thereby prompting these entities to increase their fees/charges to make up for the shortfall. This scenario proves that the economic down turn, in one way or the other affects each and every one of us.
As government, we do our best to ensure that any tariffs imposed are reasonable and do not have the undesired effect of hampering the successful development of the aviation industry. We do not merely rubber stamp recommendation from the Agencies, but consult thoroughly with relevant stakeholders in a fair and transparent manner to ensure that in the end, the imposed tariff is the tariff that could be reasonably imposed under the circumstances.
Furthermore, as opposed to the Agencies coming up with proposed increases, which normally catch the industry by surprise, we encourage the Agencies to develop sustainable revenue/funding models. This allows for better planning on the part of the industry. The CAA is currently consulting the industry with regard to the development of a revenue model.
In this regard we are in the process of developing a more predictable, fair and transparent regulatory tariff environment in the provision of our aviation services.
Last year the Minister of Transport appointed a Ministerial Task Team on Economic Regulation as a result of the impasse between the Airports Company South Africa (ACSA) and the Regulating Committee on the current tariffs.
The Ministerial Task Team on Economic Regulation has since provided the Minister with a report in January 2011. The Ministerial Task Team on Economic Regulation found the process followed by the Regulating Committee to be appropriate. However it acknowledged that the current framework does create room for ambiguity.
To this end, the Department of Transport has established a Steering Committee chaired by the Director-General and the Project Team to address the shortcomings in the current economic regulatory framework. Importantly, this process aims at restoring predictability, transparency and growth for the entire aviation industry, including the strengthening of the capacity of the Regulating Committee.
In taking this process forward, the key activities will ultimately contribute to the ultimate goal of establishing a Single Transport Economic Regulator (STER) responsible for economic regulation of all modes of transport.
The STER Task Team envisages completion of undertaking the development of legislation frameworks for the Single Transport Economic Regulator by June 2012. Thereafter, the Cabinet process to pass the developed legislation will begin in June 2012 and anticipated to finalise it latest end of January 2013. Therefore, the roll-out to establish the Single Transport Economic Regulator will be from February 2013 and onwards.
The STER Task Team acknowledges the mammoth task bestowed on it and its success will depend on the contribution of internal and external stakeholders.
International Civil Aviation Day 2011
The International Civil Aviation Day (ICAD) will be celebrated on 7 December this year at Bisho Airport. The Provincial Government of the East Cape has kindly agreed to host the event. The Council of ICAO has approved "Assistance and Cooperation for Globally Sustainable Air Transport" as the theme for this year's worldwide celebrations of ICAD on 7 December 2011 and throughout the year 2012.
The event is scheduled to take place over a period of three days, with the first two days, 5 and 6, dedicated to aviation career awareness where learners and educators will be exposed to different careers in aviation. This will take place in a form of a career exhibition.
During the two days, 3000 learners and 100 educators are expected to attend the career exhibitions. All aviation industry members are expected to showcase their careers and activities to the learners and educators. This, we believe will go a long way in addressing the issue of skills shortage in aviation, in the near future.
Update on Durban International Internal and king Shaka
Ladies and gentlemen, despite the gloomy outlook in the Eurozone and European markets we must not lose focus on the peculiar industries that keep our economies balanced such as aviation, freight and maritime even in turbulent times. In South Africa focussing on economic growth, the Airports Company South Africa (ACSA) has done much in striving to make sure that the South African aviation industry remains at an upward trend despite global market threats and uncertainty.
Whilst a lot of work has been done at the OR Tambo and Cape Town International Airports the following facts are pertinent and evident to the capacity that ACSA precipitated to the growth of our aviation industry. The following statistics and facts reflect some remarkable achievements in our aviation sector.
These include:
- Design capacity of old DIA was approximately 5 million passengers per annum - over the past 12 months KSIA has facilitated almost exactly 5 million passengers already - in the first year of operation.
- If the current growth trend continues, by March 2012, KSIA would have facilitated more passengers in financial year 2012 than the capacity of the old DIA - this, even after the impact of the global recession.
- An investment of around R1 billion to R1.5 billion at the time would have extended the old DIA useful life for roughly another five years to around 2017 (from saturation around 2012, inclusive of sweating the airport facilities). This was considered, but would have resulted in passengers and airlines having to pay the R1 billion to R1.5 billion in tariffs over that shortened period, i.e. 5 years. Following that, KSIA would have still had to be built as old DIA would then have reached saturation.
- The decision to build KSIA was taken before the recession. In the 2008 financial year, old DIA already facilitated more than 4.8 million passengers. It was already a very constrained airport.
- The commercial opportunities associated with the KSIA development are vast. KSIA has approximately 3 times more retail outlets than the old DIA, contributing over the medium to long term to the subsidisation of tariffs.
- The airport site also has property development opportunities, which would be unlocked over the next few years.
- The old DIA site has residual value in the strategic nature of the land. On the disposal of the land, it would inject further capital into ACSA to enable future airport development at other ACSA airports such as OR Tambo International.
- Lastly, had the then CEO felt so strongly at the time the decision was taken, the honourable thing would have been to resign, at that time, in protest, and in line with her fiduciary responsibilities.
Ladies and gentlemen, I am confident and convinced that after this conference we will have a renewed and improved commitment to implement ways on making the aviation industry a resounding source of managing our peoples' social and economic development endeavors.
I thank you.
