SIKHUPHE AIRPORT WORTHLESS - IATA

An aerial view of the King Shaka International Airport in Durban while it was under construction. (Pic: Googled)

MBABANE –The International Air Transport Association (IATA) says Swaziland’s new Sikhuphe International Airport is widely perceived as a vanity project. IATA is the trade association for the world’s airlines, representing about 240 airlines or 84 per cent of total air traffic.

In its special report titled ‘Unlocking Africa’s Potential’, IATA states that Sikhuphe International Airport is widely perceived as a vanity project because of its scale and opulence compared with the size and nature of the market it seeks to serve.
The airport, which is one of the Millennium Projects that have cost the taxpayer about E3 billion, is expected to start operating in the next two weeks, according to the Swaziland Civil Aviation Authority (SWACAA).

Also described as vanity projects are King Shaka International Airport and Gaberone Airport in Botswana. 
Domestically, the urban dictionary defines ‘vanity project’ as a home improvement that adds minimal value to the home and many actually decrease home value.
A vanity project is normally undertaken by people with too much money on their hands.

On the other hand, the English dictionary defines the vanity project as the state of quality of being vain, excessive pride or conceit.
It also defines it as ostentation occasioned by ambition or pride or the state of valueless, futile or unreal or something that is worthless and useless.

“The infrastructure, much of which is below international standards, also contributes to the high-cost environment,” reads the report in part.
“Several airports have monopoly suppliers in one or more areas of operations and many have high charges. Senegal increased international landing charges by 13 per cent in 2012.

“On top of this, the Airport Development Fee in Senegal stands at about US$68 (E680) per passenger— the highest in Africa. There is little transparency in how the money is being used as the new airport has been designed without airline input. The regulations covering infrastructure development should be in line with the International Civil Aviation Organisation (ICAO) principles of user consultation and transparency.

“Benin, Cameroon, the Democratic Republic of the Congo, Gambia, Guinea-Bissau, Mali, Niger, Sierra Leone, and Togo all have development charges ranging from US$9 (E90) per passenger to over US$50 (E500). This is not to say infrastructure improvements are not welcome.  Since 2010, there have been infrastructure developments well suited to their markets at Johannesburg’s Oliver R. (OR) Tambo International Airport, Cape Town International Airport, Maputo, Addis Ababa, Luanda, Nairobi, and Windhoek.”

The IATA report also addresses the issue of Sikhuphe International Airport:
“The timing of the construction of the new infrastructure must be correct to ensure that the burden of payment on the consumer is not imposed prematurely. King Shaka International Airport in Durban, Botswana’s Gabarone Airport and Swaziland’s new international airport are widely perceived as vanity projects due to their scale and opulence compared with the size and nature of the markets they serve.”
However, it can be said that Swaziland has one of the cheapest landing charges at US$5 (E50) per passenger.

AFRICAN AIRLINES NOT PROFITABLE?

MBABANE – IATA ex- plains why it is difficult to run a profitable African airline.
Mike Higgins, the IATA Regional Vice President for Africa, explained that one of the reasons for cost containment to be difficult was that currencies in countries such as South Africa, Namibia, Malawi, and Zambia were weak compared with the US Dollar or the Euro.

Swaziland and South Africa use the Lilangeni and Rand respectively which are at par. 
Higgins said while the bulk of revenue in these countries, including Swaziland, was generated in soft home currencies, the majority of the overheads – capital, financing, lease rentals, fuel uplift at foreign airports and infrastructure in foreign markets, were incurred in the stronger currencies.

As a result, he said, African airlines had to deal with a high-cost environment and cost containment was particularly difficult. He said other problems were self-inflicted.
In Africa, he said, fuel prices on average, were 21 per cent higher than the world average and the pricing system could be opaque. At some stations in Africa, for example, Higgins continued, fuel prices could be twice as high as Dubai, which obviously had consequences for competition. 
Issues of safety also affect the airline industry in Africa as many believe it is not safe to use the continent’s planes.

It remains to be seen if the country will reap the fruits of constructing Sikhuphe International Airport as most clients prefer non-African carriers.
At least, about E3 billion has been spent on the Millennium Projects, which incorporate the new airport. The airport is expected to start operating in a fortnight.
It is stated that non-African carriers account for 80 per cent of the market share to and from Africa and the continent’s cargo planes battle for the remaining 20 per cent market share.
Analysts say a lot needs to be done to improve profitability in Africa if clients prefer non-African carriers in intercontinental travel and it could mean African airlines stand no chance in cross continental travel.

This is according to the Africa Association of Airlines (AFRAA).
Carriers in this case relate to cargo planes, which is one of the markets the Swaziland Civil Aviation Authority (SWACAA) previously said it was exploring, with key interests in the Middle East.

Also making profitability a tall mountain to climb is the significance of the European Union’s (EU) banned list of aircrafts, which is seen as a challenge in African aviation.
Swaziland featured in the EU ban.
“Many African carriers cannot market as aggressively as better capitalised foreign competitors with more market clout and so shy away from intercontinental operations.

“There are only a handful of intercontinental carriers in Africa. Non-African airlines account for around 80 per cent of the intercontinental market share to and from Africa according to AFRAA. With safety issues perceived to be continent-wide, this trend will continue,” it is said.

However, it is said that African airlines were expected to post a small profit in 2013, a definite improvement on the small loss experienced in 2012 while African carriers were also expected to see a healthy increase in demand during 2013 that would outstrip the expansion in capacity and load factors would increase as a result.

‘Matsapha Airport was just fine’

MBABANE – Local civil society says government failed to heed advice to upgrade the Matsapha International Airport.
Civil society says there is no way the new airport can contribute positively to the economy of the country.

Vincent Ncongwane, Secretary General of the Trade Union Congress of Swaziland (TUCOSWA), said there was no need to spend billions of public funds on a project that would not bring benefits.
He said arrogance pushed government to go ahead with the project despite pleas to stop it.

The secretary general said big and astounded African airlines did not make profits and wondered how Sikhuphe International Airport would contribute to the economy of the country.
Quinton Dlamini, the President of the National Public Service and Allied Workers Union (NAPSAWU), described the new airport as a fraud.
He said the taxpayer was defrauded.

Dlamini said Matsapha International Airport could have been upgraded by buying modern equipment and enlarging the runway. He said Matsapha airport was close to the cities while Sikhuphe airport was far away.
Bheki Mamba, the President of the Swaziland Democratic Nurses Union (SWADNU), also complained about the construction of the new airport.

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