#AfriTravel: OR Tambo cargo expansion fueled by Acsa tariff drop

2017-03-02 08:38 - Louzel Lombard Steyn
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Cape Town - Airports Company South Africa (Acsa) is ramping up its efforts to support growth of air cargo traffic with initiatives that will ease congestion and expand warehouse space in the short term and infrastructure developments that will develop capacity in the longer term.

Speaking after this week’s Air Cargo Africa conference and exhibition in Gauteng, the general manager of OR Tambo International Airport, Bongiwe Pityi, said that while air cargo tonnages are currently under pressure, development of new infrastructure is needed to ensure that maximum advantage can be taken of during the next upswing.

At the same conference, OR Tambo was also named the African Airport of the Year for cargo, an accolade Africa's busiest airport would like to keep in future...

According to Pityi the cargo industry, which is currently under global pressure, will feel some relief from the 35% reduction in tariffs from 1 April 2017. 

SEE: Acsa's 35% tariff cut means cheaper air travel in 2017

“While landing fees, parking fees and other charges make up a relatively small component of total costs, margins are such that a significant reduction in charges can make a real difference at the margins,” she tells Traveller24.

But, as the reduction in tariffs may entice more business, there is also the fear that it will mean less income from tariffs. Pityi, however, says that the short-term projects were provided for when the budgets were drawn up - "in the knowledge that regulated tariffs would be reduced."  

Chris Zweigenthal, CEO at Airlines Association of Southern Africa, agrees. He tells Traveller24 that Acsa's 35% drop in tariffs took into account all the developments at the airport. And while “the passenger side of the airport’s upgrades and developments are done through regulated funding," he says, "the cargo expansions costs will be covered thought the commercial side of the cargo business.” 

The developments will therefore not be affected by the immense drop in Acsa tariffs come April this year, but will hopefully ensure an influx of business to OR Tambo. 

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Acsa says they have established a business development function to actively pursue new cargo routes and additional flights, in a bid to further open OR Tambo has a global and continental hub. 

The business development function does market research and analysis, marketing, promotes traffic development and seeks opportunities to develop and manage airports.

A particular focus in terms of route development is what is known as the “southern corridor” which includes South East Asia and South America.

What upgrades are expected, and why? 

In the short term, Airports Company South Africa will reconfigure and upgrade the access and frontage roads around the cargo buildings at OR Tambo International Airport to ease congestion and reduce in-transit times.

ALSO SEE: OR Tambo named Africa's cargo airport of the year + 3 developments to keep an eye on

The reason for the upgrades is in anticipation of an increase in the need to cargo facilities, even though the industry has seen a dip in the past year. 

Total air cargo processed through OR Tambo International Airport in 2016 of 350 500 tonnes was about 10% down on the preceding year as global trade came under pressure. 

In spite of this dip, Pityi says the cargo facilities at OR Tambo International Airport are already operating at close to capacity.

“The balancing act we need to achieve is to have the infrastructure in place for when economic conditions turn, but not so far in advance that it creates an unreasonable cost burden,” Pityi says. “No one likes a white elephant, but it would be most unfortunate if the infrastructure is not there when it’s needed most,” she says.

In the medium to long term, plans for a midfield cargo terminal are being aligned with a master development plan for the entire airport precinct. She points to major commercial and retail expansion in the airport’s western precinct which is part of the Gauteng City Region’s aerotropolis plan, with announcements of the precinct implementation anticipated in the near future. 

ALSO SEE: OR Tambo International Airport to get R42 million boost

Pityi says the master development plan has a horizon of decades and careful consideration has to be given to integrating plans for infrastructure that will have a potential life span of 30 to 40 years.

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