No more airports just for the sake of it – ACSA exec

Gone are the days of Airports Company SA providing infrastructure just for the sake of providing infrastructure, Fundi Sithebe, ACSA chief operating officer, said on Friday.

“We have to pass on efficiencies to passengers and airlines by providing what is structurally fit for the end users,” she said on the second day of the AviaDev aviation development conference in Cape Town.

“For that one needs a good balance between what we expect from airlines and what airlines expect from us, to make sure we ‘sweat’ our assets.”

Profitability

Asked about the profitability of smaller airports in SA, she said ACSA looks at the overall profitability of its network and not per airport.

In her view, ACSA’s network has a good mix of large airports like OR Tambo in Johannesburg, as well as Cape Town International Airport and regional airports – working like “hubs and spokes”.

For this reason, ACSA believes it must expand airport infrastructure in the country, but this must be done in the most cost-effective way.

“We are, therefore, open to the private sector as we realise we have to increase the capacity into our airports. Public-Private Partnerships (PPSs ) play an important role,” she said during a panel discussion on financing airport infrastructure in Africa.

World Bank

During the panel discussion, Alexander Herring, director for Africa of the World Bank group, said involvement in airport infrastructure development in Africa is very important for the bank.

He explained that the bank looks at the impact airport development would have on a country and its people. The first consideration, though, is whether the project will be profitable in the long-term.

That is why feasibility studies play an important role in the eventual decision made by the bank whether to invest or not.

The World Bank also provides advisory services to airport projects.

African airports

Other issues raised during the panel discussion included political will. Panelists discussed, for example, its role in liberalising the aviation industry, and the impact on financing “bottlenecks” for successful airport development in Africa. 

It was also noted that in Africa, the development of smaller airports might be more economically viable than being tempted to develop the full capacity of an airport too soon. At the same time, the smaller the airport, the smarter its management has to be in order to make it sustainable.

Koen Brinkman, director of airport strategy and studies at Netherlands Airport Consultants, emphasised that, due to the already high cost for airlines to operate in SA, private sector investors look at profitability and want to be sure their investment will bring the benefits expected.

Another member of the panel, Nicolas Deviller, deputy CEO of Ravinala Airports in Madagascar, pointed out that the liberalisation of air traffic is very important.

He also said that finding the finance for the development of an airport is “easy”, but it must go hand in hand with involving the right expertise from the private sector to ensure both airlines and the local population will benefit.