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Cape Town - The current aviation environment in South Africa and the rest of Africa is more challenging and competitive than ever, according to Javed Malik co-founder of PAK Africa Aviation, which owns Johannesburg-based low-cost aviation company Skywise Airlines.
Airports Company SA (Acsa) suspended Skywise's flights on December 2 2015 due to unpaid airport charges for landing, take off, parking of aircraft and related service charges. Acsa has maintained all along that its decisions regarding Skywise were taken in its own best commercial interests, and to ensure the sustainability of the aviation industry.
In Malik's view, if ever there was a time for Africa to redefine the aviation sector as a powerful tool for socio-economic development – it is now. He was recently appointed to be the inaugural co-chair of the newly formed Regional Aviation Working Group of the South African Chapter of the BRICS Business Council (SA-BBC).
Fin24 asked Malik to explain more about this council and its activities.
What is the BRICS Business Council? Who started it and who are some of its members? Where is it based?
The BRICS Business Council is a coalition of private sector organisations, captains of business and conglomerates who form a sub-structure of the BRICS alliance of nations.
BRICS countries have two billion people and occupy 40% of the planet’s land area. We produce a third of the world’s industrial products and one half of agricultural goods.
The BRICS Business Council was formed in March 2013 during the Fifth BRICS Summit in Durban. Each country has its own chapter of a Business Council and in the case of South Africa, the unit is called the South African Chapter of the BRICS Business Council (SAC-BBC).
It is chaired by Dr Iqbal Survé, a leading businessman, philanthropist, human and social rights activist, and founder and chair of the Sekunjalo Group. SAC-BBC is headquartered in Cape Town.
The overriding objective for all the Business Councils is to promote and strengthen business, trade and investment ties among the business communities of the five BRICS countries.
Seven working groups in the areas of infrastructure, manufacturing, financial services, energy and green economy, skills development, agribusiness and deregulation have been formed to facilitate implementation of the principal objectives of the BRICS Business Council.
While all seven are of utmost importance, deregulation, skills development and building infrastructure are high on the list of priorities for the SA-BBC, based on the immediate needs of South Africa and the greater continent.
What have been some of the activities of the Council – for instance has it met with delegations of other BRICS countries and if so, what were some of the outcomes – for instance business deals?
So much has been achieved by the SA-BBC in enhancing cooperation and ensuring that South Africa is able to channel foreign direct investment into the economy, create jobs and enhance skills development by leveraging on the BRICS dividend.
Through BRICS, South African companies have access to the global market, and access to capital.
The SA-BBC has been instrumental in ensuring major achievements within BRICS such as the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA), both of which have led to tangible benefits to and created considerable opportunities for businesses.
The NDB invests in crucial sectors of BRICS and emerging nation’s economies, such as infrastructure and sustainable development projects. The CRA provides an additional safety net.
The first regional office of the NDB is the Africa Regional Centre (ARC), located in Johannesburg.
Let me point out at this juncture that I totally agree with Dr Survé who has repeatedly insisted that our partnership with BRICS is not meant to be at the exclusion of other investment partners, such as the EU and North America. It is intended to augment these partnerships and draw increased investment.
Why was the aviation sector part of the BRICS focus?
The aviation and aeronautics sector are a catalyst for growth and is a powerful tool for economic development, intra-continental trade, and poverty alleviation through job creation.
BRICS governments and the private-sector within the five countries, and emerging economies understand that they must claim their stake and lead progress in this powerful sector.
According to the Fourth Annual Report of the BRICS Business Council, globally, airline traffic is forecast to grow over 4.5% each year for the next 20 years, which will drive the need for thousands of new aircraft.
The current worldwide fleet of 25 000 aircraft will grow to approximately 45 000 between 2016 and 2036 and the passenger numbers will reach 7.2 billion by 2035. The demand for air travel will continue to put pressure on the aviation sector.
It is important for BRICS countries to have a highly efficient and effective aviation industry supported by government policies and regulation particularly on the regional aviation sector. Enhanced BRICS government and private sector cooperation will help in fostering new opportunities for investment in the sustainable and intelligent aviation infrastructure of the future.
Hence the establishment of the Regional Aviation Working Group for which I was recently appointed co-chair.
What are the plans of the of the Regional Aviation Working Group?
The South African aviation industry contributes over R74bn to the economy and supports 350 000 jobs within the airlines, airports, grounds and auxiliary levels South Africa, and greater Africa’s aviation industry holds great promise for expansion.
We need to exploit this opportunity and encourage the private sector to be fully involved and address the issue of connectivity on the continent.
Before I go deeper into our vision, I would like to thank Dr Survé and his team for the confidence shown on us. With team work and by applying my experience, education and networks will ensure the industry keeps pace with the continental and global markets.
Please give details of the kind of cooperation your working group with have with the other BRICS countries?
Our collective profiles within the BRICS association of nations is very impressive and working together we will implement a winning strategy. Fellow BRICS nations have made remarkable progress in terms of infrastructure and operations models.
Let me give you the breakdown of success angles and areas with great potential as follows:
Brazil
Embraer began with regional aircraft and military COIN aircraft, and has advanced into the business jet market to the extent of opening a factory in Florida.
It will follow Airbus and Boeing in launching a re-engined version of its E-Jet airliner family. It has big ambitions, too, in military aerospace. Its Super Tucano light attack aircraft was selected by the US for supply to the Afghan Air Force.
Russia
The country is historically an aerospace technology leader. The Soyuz rocket remains the only way the astronauts of any nation can get to the International Space Station. The country has recorded a degree of commercial aviation success too and has the MC-21.
India
The country has a joint project with Russia to build stealth fighters and is also planning to develop its own unmanned drone.
China
The country will need 5 000 pilots annually over the next 20 years.
South Africa
Our aerospace industry is known for its innovative solutions. The country has two original equipment manufacturers: Denel Dynamics and Advanced Technologies which produce unmanned air vehicles and missiles.
We also have aero-structures and aircraft component manufacturers (Saab Aero-structures and Aero-sud) and some small manufacturers of sports aircraft and gliders. There are also companies manufacturing avionics and sensors.
Any other comment?
Our primary focus will be to bring together leading representatives of the aviation sectors representing government authorities, airlines, aerospace industries and service providers.
We want strategic dialogue on the prospective aviation matters among the BRICS countries. Our goal is to develop a strong sector in both passenger and cargo transport among Brics countries.
We will promote joint ventures on establishing maintenance, repair and operating facilities. We will also promote secondary airports and the balance of traffic rights agreed in the underlying bilateral agreements amongst BRICS member states.
Safety and security matters within the aviation space of BRICS are of paramount importance.
We have also agreed with Dr Survé that meaningful transformation that encompasses youth and women empowerment will be a top priority in all our operations.
The BRICS Aviation Group could not come at a better time due to the fact that South Africa will be hosting and Chairing the 2018 BRICS Conference under the leadership of Dr Survé as chair. At this conference it will be our window of opportunity to bring together trade, tourism and transport in the industry.
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