Durban’s King Shaka Airport Will Be Ready For Air Freight Services On May 1St

Airports Company South Africa (Acsa) has released a statement indicating that the construction of Durban’s new premier airport, King Shaka Airport will be ready for commercial and passenger air freight by May 1st this year, just in time for the 2010 World Cup in June. The building of this airport, as impressive as it is, has come under huge debate in the past couple of years. Many feel that an airport of this magnitude in Durban is unnecessary and illogical, whilst others are looking past the short term expenses and are more optimistic about the long term benefits of the airfreight services it could make possible. Let’s take a look at the good, the bad and the ugly:

The Good

Experts in South Africa from numerous organizations such as the Economic Development and Tourism MEC, the Dub Trade Port (DTB) and the National Council of Provinces have all had positive feedback regarding the new international air freight structure. Michael Mabuyakhulu, MEC of the Economic and Development Tourism portfolio is confident that the new airport will drive economic growth in the area through the promotion of tourism, resort development as well as contribute towards the growth of passenger and air freight services in the area.

Job creation was always a factor in the construction and operation of the airport. Air freight companies from the private sectors that are expected to operate from the new site, will need to employ people to run their impressive new offices and the new location, this coupled with the massive job creation opportunities that were provided with the construction of the airport have always been a primary goal for the new passenger and commercial air freight site.

The long term benefits of the new international air freight site include a massive increase in the number of passengers who will be able to pass through the airport. Currently, Durban international airport can handle about 4.5 million passengers a year. This will be almost double to 7.5 million passengers a year at the new airport.

The current Durban International Airport is ideally positioned to be converted into a sea freight and air freight cargo dugout container terminal where cargo can be stored for South Africa’s busiest sea port.

The Bad

Board of Airline Representatives of South Africa (Barsa) CEOAllan Moorehas openly stated that the building of this kind of airport in this part of Durban will not provide any value to the local sea and air freight industry. He stated the following:

“There is nothing at this airport that would have warranted they spend on the facility. To move the airport from the southern part of the city to stimulate growth in the north consequently results in depriving the south of any economic stimulus.

“The new facility was built with little or no consideration of the general aviation community and a number of operations in this sector in Durban are under threat. The new airport also does not currently have any facilities for either military or police aviation.”

The Ugly

The biggest concern about the King Shaka airport is that the R3.15-billion budget that was initially approved for the airport has almost doubled in budget and is now expected to cost about R7.6 Million rand to complete. This is going to directly impact the cost of local and international flight costs for passengers and air freight companies.

Acsa applied to its regulator for a tariff increase to passenger and cargo flights of 133% which was immediately rejected by the regulator. However, the national regulator has suggested a tariff increase of 60% in 2010 followed by a further 25% in 2011. Effectively, air freight services and passengers can expect to pay 89% more for flights in 2011, something that will drastically decline the amount of passengers actually taking up these services. King Shaka Airport was by far the primary reason for these tariff increases.

The International Air Transport Association (Iata) who are responsible for representing over 230 airlines internationally, had the following to say:

“Quite simply, the extravagance that is King Shaka International Airport cannot be justified. There is no sustainable business case underpinning its rushed development. Local and international airlines agree that the airport is premature with insufficient traffic or demand to support it.

“Acsa has allowed the program costs to spiral out of control. Instead of keeping within the original R3.15-billion budget, Acsa now expects King Shaka to come in at about R7.6-billion, and it wants to pass the entire cost burden onto airlines and their customers, recouping its outlay by hiking tariffs at OR Tambo International Airport and its other airports.”

What do you think?

We’d love to hear your comments below. Are you happy to pay increased tariffs for your domestic and international flights so that Durban and subsequently South Africa can benefit in the long term from improved international air freight services? Or do you think this is just another hasty decision made by the South African Government in reaction to hosting the 2010 World Cup? Comments please…

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