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Air transport adds R154.8bn to SA's GDP - report

Jun 24 2017 10:00
Carin Smith

Cape Town - Air transport supports 490 000 jobs and contributes $12bn (about R154.8bn) to South Africa's gross domestic product (GDP), according to a report issued by the International Air Transport Association (IATA) this week.

Oxford Economics conducted the study on behalf of IATA.

Europe and Asia-Pacific are the largest sources of arrivals to SA after Africa. In 2014, 3.3 million passengers arrived to SA from Europe (16.3% of the total) and 1.3 million passengers arrived from Asia-Pacific (6.5%).

Airlines, airport operators, airport on-site enterprises (for example restaurants and retail), aircraft manufacturers and air navigation service providers employed 70 000 people in SA in 2014.

READ: SAA CEO wants to focus on human trafficking, cyber security

"In addition, by buying goods and services from local suppliers the sector supported another 130 000 jobs. On top of this, the sector is estimated to have supported a further 57 000 jobs by paying wages to its employees, some or all of which are subsequently spent on consumer goods and services," states the report.

Furthermore, foreign tourists arriving by air in SA, who spend their money in the local economy, are estimated to have supported an additional 230 000 jobs in 2014. During the same year, foreign tourists spent $9.2bn in SA, supporting restaurants, hotels, transport providers and others who cater to tourists, according to the report.

This means that 3.5% of SA’s GDP is supported by the air transport sector and foreign tourists arriving by air, according to the report.

Vital role

“The study confirms the vital role of air transport in facilitating over $110bn in exports, some $140bn in foreign direct investment and around $9.2bn in inbound leisure and business tourism for SA. With the country now in a recession it’s time to re-double efforts to promote SA as a destination for business, trade and tourism,” said Muhammad Ali Albakri, IATA’s regional vice president for the Middle East and Africa.

“Affordable, safe and reliable air transport is crucial to economic growth. It promotes skills development and is a catalyst for jobs. We urge the SA government to remove any impediments, including unnecessary red-tape and policies that hinder air connectivity and the trade, investment, tourism and job opportunities it facilitates and stimulates.”

Rankings

Around 390 000 aircraft land and take off from one of SA’s main airports every year. Johannesburg’s OR Tambo International Airport is the country’s busiest in terms of passengers with over 18.5 million travellers passing through the airport in 2014.

The report states that SA ranks 19th out of 37 African countries for visa openness and 17th out of 37 for cost competitiveness in the air transport industry, based on air ticket taxes, airport charges and VAT.

The research points out that infrastructure, ease of travel and cost competitiveness are vital. According to executives surveyed by the World Economic Forum for the study, SA’s transport infrastructure quality score places the country first out of 37 African countries surveyed and 48th globally.

The report further emphasises that the air transport sector’s ability to connect SA to emerging countries and fast growing cities can help drive economic growth.

For example, there are four direct flight destinations among the ten fastest growing countries in the world as measured by GDP growth and eight direct flight destinations among the 20 fastest growing countries. There are 20 direct weekly flights among the ten fastest growing cities in the world as measured by GDP growth and 43 direct weekly flights among the 100 fastest growing cities.

Read Fin24's top stories trending on Twitter:

iata  |  south africa  |  aviation  |  airlines  |  sa economy
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