AIRPORTS COMPANY SOUTH AFRICA 1
PRESENTATION TO THE TOURISM PORTFOLIO COMMITTEE November 2018 AIRPORTS COMPANY SOUTH AFRICA 2
CONTENTS
3 COMPANY OVERVIEW AND HIGHLIGHTS
8 AIRLIFT STRATEGY & INITIATIVES
29 AIRLIFT KEY PARTNERSHIPS
42 AIRLIFT STRATEGY SUCESSES
42 AIRPORTS INFRASTRUCTURE ISSUES
42 TARIFFS IMPACT ON TOURISM 3
COMPANY OVERVIEW & HIGHLIGHTS OUR GEOGRAPHIC AIRPORTS COMPANY SOUTH AFRICA 4 FOOTPRINT INDIA Chhatrapati Shivaji International Airport in Mumbai is an equity investment.
GHANA The Company performs technical advisory and consultancy services at Kotoka International Airport in Accra.
BRAZIL Guarulhos International Airport in São Paulo is an equity investment.
SOUTH AFRICA We operate nine airports and provide technical advisory and consultancy services for non- ACSA airports. AIRPORTS COMPANY SOUTH AFRICA 5 HIGHLIGHTS
• Board vacancies filled
• The company continued to be resilient despite challenging operating conditions
• Maintained sound financial performance and satisfactory airport service levels
• Remained steadfast in the implementation of our governance framework and operating model
• Seven transformation sector strategies progressing well
• Continued to strengthen Supply Chain Management governance processes
• Building relationships with our stakeholders is pivotal in creating sustainable value AIRPORTS COMPANY SOUTH AFRICA 6 ECONOMIC IMPACT
WHAT ARE WE DOING TODAY TO ENSURE THE LEGACY OF TOMORROW?
ACSA contributed R9.5 billion ACSA supported ACSA supported to 14 950 R2.8 billion SA jobs of income SA’s in FY2017* to workers in SA economy in FY2017
• This figure comprises of 2 992 direct employees (not including contractors), around 5 519 jobs as a result of supply chain spending and 6 440 supported through spending of ACSA employees and suppliers employees
Source: PwC Economic Impact Study commissioned by ACSA 2017 7
AIRLIFT STRATEGY & INITIATIVES AIRPORTS COMPANY SOUTH AFRICA 8
KEY OBJECTIVES
• New and existing routes, by Develop new and existing airlines
• Existing routes and airlines performance through Maintain regular contact with airlines • Trade and Tourism growth through increase in flights, Promote improves schedules and deployment of larger aircrafts to our airports AIRPORTS COMPANY SOUTH AFRICA 9 THE AIRLIFT FRAMEWORK
Increased Traffic and Route Airport more opportunities for Development Economic & Trade and Tourism Committee Rural Structure Development Tourism Agencies Agencies = Business Chamber Local Municipalities AIRPORTS COMPANY SOUTH AFRICA 10 THE GOLDEN TRIANGLE ▪ Over 85% of the flights depart and arrives at the below ACSA airports
O.R Tambo International
King Shaka International
Cape Town International
▪ The three main gateways account for over 80% of the total traffic, with JNB-CPT city pair being amongst the top 10 busiest in the world 11
AIRLIFT KEY PARTNERSHIPS AIRPORTS COMPANY SOUTH AFRICA 12 CAPE TOWN AIR ACCESS
Top Opportunities • New York • Brussels • Hamburg • Sydney • Stockholm • Dublin Hong Kong • Sao Paolo • Dusseldorf • Berlin • Copenhagen Singapore • Lagos • Dar Es Salam • Mauritius • Lusaka • Maputo Cape Town International
SEATS ORIGINATING FROM CTIA (MILLIONS ) Key Focus Area
1. Intercontinental
6,83
6,75 6,33 2. Regional (SSA) 6,01
*Largely seasonal capacity from EU 2015 2016 2017 2018 AIRPORTS COMPANY SOUTH AFRICA 13 CAPE TOWN AIR ACCESS
Since its inception in July 2015 CTAA has contributed towards: Landing 13 new routes and 18 route expansions at Cape Town International Airport (CPT) Doubling international seat capacity at the airport with 1.5 million seats added Leading to 16% international terminal passenger growth in 2016 and 20% growth in 2017
International air cargo has grown by 52% in 2017, Johannesburg OR Tambo (JNB) grew by 17% and King Shaka (DUR) by 12%. This has meant and estimated increase in direct tourism spending of USD 400 million for the local region AIRPORTS COMPANY SOUTH AFRICA DURBAN DIRECT 14
Top Opportunities • Mumbai
• Harare • Lusaka • Nairobi
• Upington • Polokwane • Mthatha • Plettenberg Bay
King Shaka International
SEATS ORIGINATING FROM KSIA (MILLIONS) Key Focus Area
1. Intercontinental
3,78 3,66 2. Regional (SSA) 3,59 3. Domestic 3,08 King Shaka International *Driven by Domestic; recent UK link 2015 2016 2017 2018 AIRPORTS COMPANY SOUTH AFRICA 15 GAUTENG AIR ACCESS
Top Opportunities • Mumbai • Phuket • Lisboa • Bangkok • Dublin • Brussels • Auckland • Shanghai • Melbourne • Brisbane
• Lagos • Dar Es Salam • Mauritius • Libreville
• Upington • Mthatha • Plettenberg O.R Tambo International Bay SEATS ORIGINATING FROM ORTIA (MILLIONS)
Key Focus Areas
14,54 14,51 1 14,33 . Intercontinental 14,13 2. Regional (SSA) 3. Domestic 2015 2016 2017 2018 *SAA shed over 1.2 million seats & Mango only filled 35% AIRPORTS COMPANY SOUTH AFRICA 16 NELSON MANDELA BAY AIRLIFT
Top Opportunities:
Short-Haul: (12 – 24 Months)
1. Kruger – Mpumalanga 2. Windhoek – Namibia 3. Kigali – Rwanda 4. Harare – Zimbabwe 5. Lanseria — Gauteng
Long-Haul: (5 – 8 Years)
1. London – UK 2. Frankfurt – Germany Current Pipeline SECONDARY AIRPORTS: AIRPORTS COMPANY SOUTH AFRICA 17 INTRA-CONNECTIVITY
With Golden Triangle
▪ The golden triangle remains C the anchor for regional Airports U R connectivity R E Without Golden Triangle N T ▪ Outside the triangle, regional connectivity is below acceptable level thus constraining mobility AIRPORTS COMPANY SOUTH AFRICA BRAM FISCHER AIRPORT AS 18 REGIONAL ANCHOR Regional airports integration into the national air transport network will focus on Bram Fischer as an anchor for regional connectivity
❑ Connectivity for Small communities • Bram Fischer to link Coastal and Inland Cities • Regional aircraft has favourable economics and configuration F U ❑ Collaboration is key T • Airlines • Airport U • City & local R government E • stakeholders
❑ Enabling Structures • Garden Route Airlift • Mangaung Airlift • Northern Cape Airlift • Eastern Cape Airlift 19
AIRLIFT STRATEGY KEY SUCCESSES AIRPORTS COMPANY SOUTH AFRICA 20 KEY SUCCESS FACTORS
O.R Tambo International Airport Cape Town International Airport King Shaka International Airport *Seasonal
Kigali/Harare Vienna Rome London
Nairobi/Victoria Zurich Sao Paolo Falls/Livingstone
Dubai Hong Kong Addis Ababa
Madrid
Frankfurt Gatwick Gaborone/Windhoek
St. Helena Gatwick Munich
Singapore Via OR Tambo Lubumbashi Maun AIRPORTS COMPANY SOUTH AFRICA 21 KEY CHALLENGES
FUNDING: Airline incentivisation and route marketing
EXTERNAL DEPENDENCIES: Airlines and the industry operating environment (i.e. aircraft availability and oil prices)
COMMITMENTS: From key stakeholders to promote air access i.e. agencies
TARIFF PERMISSION: Funding for Bram Fischer Airport infrastructure to support the regional air access strategy and meet demand. 22
AIRPORTS INFRASTRUCTURE ISSUES AIRPORTS COMPANY SOUTH AFRICA 23 AIRPORT INFRASTRUCTURE ISSUES
Congestion and Capacity Compliance and Compatibility Efficiency and Technology • Terminal Congestion • Code F compliant to • Account for changes in Check-in facilities, boarding accommodate larger aircraft the landscape: gates, departures lounges such as Airbus A380 in • Technology e.g. self etc. Cape Town service end to end • Airside Capacity –Apron • Related taxiways for faster process for passengers parking stands; to turnaround times on runway accommodate and unlock traffic growth (passenger and cargo). • Runway Capacity to accommodate traffic growth 24
RESPONSE TO INFRASTRUCTURE ISSUES AIRPORTS COMPANY SOUTH AFRICA 25 O.R. TAMBO INTERNATIONAL AIRPORT MASTER PLAN AIRPORTS COMPANY SOUTH AFRICA 26 O.R. TAMBO INTERNATIONAL REMOTE APRON STANDS
RAS • 9 Code F stands in MARS configuration (9 Code F or 18 Code C) and 7 Code C stands linked with the Western Terminal Complex via an internal airside link road. AIRPORTS COMPANY SOUTH AFRICA 27 O.R. TAMBO INTERNATIONAL MIDFIELD CARGO PHASE 1
The Phase 1 Cargo development will consist of general cargo warehouses, express and specialised cargo handling facilities, freight forwarders warehouses as well as respective truck manoeuvring and parking areas to accommodate 750 000 tonnes of Cargo per annum
It will consist of a total built-up area of approximately 700 000 m².
• 220 000 m² of cargo and specialised cargo handling facilities • 70 500 m² of 1st tier cargo handling facilities • 40 000 m² of specialised/express cargo facilities • Forwarders/supporting 2nd tier facilities: 110 900 m² • Mezzanine offices of approximately 40 000 m² • Access Roads WESTERN PRECINCT AIRPORTS COMPANY SOUTH AFRICA 28 COMMERCIALISATION PHASE 1 The Development is on a 8.5 hectare site with 180 000m² of bulk of mixed use development located on the north western precinct of ORTIA. The development will compromise of 7 phases : • Offices – 50 000m² • Retail – 21 000m² • Transport Station – 5 000m² • Hotel and Conference – 22 000m² Phase 1A which shall consist of the development of A Grade 33 000m² office development and associated facilities as follows: • Block A – 13 500m² - 4-star green rated, 6 storeys above podium (SACAA) • Block B – 12 000m² - 4-star green rated, 5 storeys above podium (ACSA) • Block C – 5 000m² - 4-star green rated ,4 storeys above podium • Block D – 2 500m² – 4-star green rated, 2 storeys above podium (common use facility which includes, canteen, gym and other amenities) • Upgrade of the Northern Roads • Super Basement parking of 1967 bays CAPE TOWN INTERNATIONAL AIRPORTS COMPANY SOUTH AFRICA 29 AIRPORT MASTER PLAN AIRPORTS COMPANY SOUTH AFRICA CAPE TOWN INTERNATIONAL 30 NEW REALIGNED RUNWAY
New Realigned Existing Runway Runway
The existing runway will be displaced at the northern end with 220m to the east and rotated at angle of 11.5 degrees.
The new realigned runway will be 3500 m long and 75 m wide and fully Code F compliant. Allowing for a future independent runway system
The runway will initially include two RET’s and a partial parallel taxiway as indicated on the layout CAPE TOWN INTERNATIONAL AIRPORTS COMPANY SOUTH AFRICA 31 TERMINAL 2 REDEVELOPMENT
Terminal 2 Redevelopment comprises of the following: • The expansion of the international departure baggage hall • The addition of 2 Code F international carousels • The reconfiguration of the customs and meeters & greeters areas • New e-emigration gates • Additional self service check-in & security capacity • New arrivals retail mall • New basement level AIRPORTS COMPANY SOUTH AFRICA 32 CAPE TOWN INTERNTIONAL NEW DOMESTIC ARRIVALS • Redevelopment of Domestic Arrivals Terminal • Increased meeters & greeters area • Increased baggage reclaim area that will provide additional space between carousels • Additional carousel ( #7) • Basement level for delivers & commercial storage • Second Floor retail enablement ( adjoining domestic departure lounge ) AIRPORTS COMPANY SOUTH AFRICA 33 KING SHAKA INTERNATIONAL AIRPORT MASTER PLAN AIRPORTS COMPANY SOUTH AFRICA 34 KING SHAKA INTERNATIONAL TERMINAL EXPANSION
• Expansion of the terminal building towards the north, to provide additional capacity for the international terminal. • Two wide body carousels on the arrivals level. • Inclusion of an additional check-in bank, on the departures level, with additional international airside retail and emigration reconfiguration. AIRPORTS COMPANY SOUTH AFRICA 35 BRAM FISHER AIRPORT AIRPORT DEVELOPMENT
• Reconfiguration of the existing terminal to provide additional space for both the lounge and common concourse space.
• Construction of one additional code C stand. A new GA area will be constructed west of the new stand. AIRPORTS COMPANY SOUTH AFRICA 36 EAST LONDON AIRPORT AIRPORT MASTER PLAN
• Expansion of the departure lounge by approx. 300m2, including allowances for retail • Construction of a Multi-story Parkade and access roads to accommodate future traffic growth. • The Multi-story Parkade will have a minimum of 800 bays in total. AIRPORTS COMPANY SOUTH AFRICA 37 GEORGE AIRPORT LAND-USE PLAN
• Extension of the terminal building with a new processing facility, including a concourse to provide for contact stands. • Relocation of existing Rescue and Fire Fighting Facility and General Aviation area PORT ELIZABETH AIRPORT AIRPORTS COMPANY SOUTH AFRICA 38 AIRPORT MASTER PLAN
• Extension of the terminal building with a new processing facility, including a concourse to provide for contact stands. AIRPORT TARIFFS
IMPACT OF THE AIRPORT TARIFFS ON TOURISM AIRPORTS COMPANY SOUTH AFRICA 40 AIRPORT TARIFFS
Airports tariffs accounts for 5% of an airline direct operating cost
AIRLINE COST STRUCTURE Passenger service * Air navigation charges 4% Cabin crew 4% Other 5% 1% Airport charges 5%
Aircraft ownership Fuel and oil 11% 33%
Station and ground 7%
Reservations, ticketing, sales and promotions 7% Maintenance and Flight deck crew General and overhaul 7% adminstrative 9% 7% Source: IATA Economics 2014 AIRPORTS COMPANY SOUTH AFRICA 41 AIRPORT CHARGES
PSC Tariff
Domestic R87 Passengers Passenger Levied on the +/- 67% of service Regional R181 airline ticket as a total charges regulated charge International R238 (VAT incl.)
Airport charges Landing fee +/- 50% off all • Based on aircraft revenues Landing fees maximum take-off weight Airlines • Differentiated between Airline +/- 33% of domestic, regional and operational cost total international Parking fee
• Based on time parked Parking fees in excess of 4 hours • Differentiated between domestic, regional and international
The airport tariffs charged on an air-ticket are unlikely to influence traveller behaviour. THANK YOU