FROM MAGAZINE: O R Tambo’s upbeat growth prospects

Located in the commercial hub of South Africa, the country’s top airport, O R Tambo International, has seen an uptick in passenger and cargo volumes. Having improved its global quality rankings and performance considerably, and with the aerotropolis planned around it, the airport’s position is all set to go up several notches higher, Nahida Jafferi reports.

Africa’s economic hub Johannesburg shows an upbeat picture with rising cargo and passenger volumes, infrastructure developments. The city will soon be powered by the approved aerotropolis that will take its position several notches higher. Johannesburg is delivering empowering growth to its gateway airport O R Tambo International or vice versa.

The top airport in South Africa (SA), O R Tambo has recently moved up five places to the 24th place in the global Airport Service Quality category for airports in the third quarter of 2017. It also received the OAG On-time performance award.

O R Tambo plays a hub role in a larger network of airports across South Africa. “For this reason there, have been ample capacity and connectivity options available at our supporting airports, and hence growth at these stations has also been noted, said Bongiwe Pityi-Vokwana, General Manager, O R Tambo International Airport.

Airports Company South Africa (ACSA) undertook a forecasting exercise for its airports in 2017.

“For O R Tambo International Airport, the anticipated growth in passenger numbers is roughly three percent year-on-year. It anticipates a cargo volume growth of 3.8 percent year-on-year.  On average, cargo volume growth at the airport over the past nine years has been over 15 percent year-on-year,” cited Pityi-Vokwana.

To accommodate this growth, Pityi-Vokwana highlighted the need for additional handling and warehousing capacity, as well as the associated landside and airside infrastructure.

“The Ekurhuleni Metropolitan Municipality,” said Pityi-Vokwana, “in which the airport is located, and the Gauteng Province continue to support the growth of the airport and its surrounds. Major forwarding and distribution initiatives have been approved within a 10km radius of the airport which will support the effective movement of air cargo through the airport.”

Plans for a new cargo precinct at O R Tambo, are progressing.  “Due to the magnitude of the envisaged facilities, the planning and design work for the first phase of the precinct is being undertaken as a separate project. The first phase of the precinct will be able to cater for annual volumes of up to 750,000 tonnes,” said Pityi-Vokwana. The precinct will have dedicated areas for the various aspects of the air cargo and logistics industry as each has unique requirements.

The City of Ekurhuleni recently approved the 30-year aerotropolis master plan, the first in Africa.

Being created near O R Tambo airport, the aerotropolis will be a zone within a 30-km radius of the airport in which economic hubs will be created for different industries, such as manufacturing and hi-tech industries, agribusiness and food processing, logistics and distribution, among others.

“Initiatives to stimulate growth and economic development include frameworks for Special Economic Zones to enable further growth. The aim is to bring more business, people and goods to South Africa as well as to share South African produce and resources with the world,” commented Pityi-Vokwana.

World’s top carriers including Emirates SkyCargo, Air France KLM, Delta Airlines, Turkish Airlines, Lufthansa, South African Airways, among others operate from O R Tambo.

National carrier South African Airways Cargo saw two percent growth in volumes in FY 2018 than same period in 2017, from O R Tambo.

The uptick in cargo volumes
The airport handled 41,5000 tonnes of cargo in 2017.  The volumes at the airport have remained stable this year following double-digit growth since 2016.

“South Africa is still a country with a strong fiduciary regime which underpins formal business transactions and gives international businesses a sense of comfort when trading with local entities.  There are several underlying factors which contribute to the on-going demand for goods and services produced to and from South Africa,” informed Pityi-Vokwana.

SA is recognized as a supplier of good quality raw and manufactured products evidenced by the partnerships with global brands such as Mercedes Benz, Ford and Marks & Spencer.  South Africa has a thriving automotive, machinery and manufacturing market for equipment, parts manufacturing and assembly. In 2017, automotive made up 13.9 percent of the country’s total export earnings. The government statistics revealed that exports to the US declined in 2017 due to the appreciation of rand against the US Dollar and new model introductions. Total automotive revenue in South Africa amounted to over $42 billion in 2017, of which exports accounted for $13 billion.

As per the data shared by Pityi-Vokwana, machinery and equipment contribute around 50 percent to the overall volumes, which is the highest.

“Based on 2017 figures, the estimated contribution on the number of transactions in the major sectors is 11 percent from textiles and associated articles, 14 percent from pharma and medical, seven percent from animals, animal products, and perishable goods. The airport is a transshipment point for about 25 percent of the pharmaceutical and medical products arriving here,” informed Pityi-Vokwana.

Most of the commodities moving through the airport are in the consumer and produce sectors.

South Africa is known as a source of high quality agricultural and perishable products and live animals. “The animal, agricultural and perishable sector is a significant component of the goods being moved largely because of our status as a hub for the South African Development Community (SADC) region. We also serve markets further afield in Sub-Saharan Africa,” said Pityi-Vokwana.

The uptick in perishables volumes
The airport is also seeing considerable volumes of pharmaceuticals and medical equipment being moved as airfreight. 

Talking about certifications for the facility, Pityi-Vokwana commented, “With any highly regulated and standardised environment, the introduction of new certification procedures might initially seem daunting and cumbersome. We do have several tenants and warehouses on site that have aligned with the GDP standards as well as with IATA CEIV processes.”

As the airport has recognized and certified facilities, there is a greater uptick in the volumes of pharmaceuticals. With any temperature-sensitive value chain, the maintenance of the cool chain is of critical importance to handlers, especially in South Africa’s summer months. 

To minimise excursions for temperature sensitive products, the airport does considerable planning before flight arrivals, to make available the appropriate equipment, resources and routes to the perishable centre.

“South Africa is internationally renowned for its agricultural fresh products and our infrastructure is well-suited to the handling and short-term storage of the products at the temperature settings required. Fit-for-purpose cool rooms are in place to deal with the high volumes, which are tracked through remote monitoring.  Generally, standard temperature-loggers are also fitted to the containers,” informed Pityi-Vokwana.

Cargo handling at O R Tambo Airport for South African Airways Cargo

Tourism – a major growth driver
Tourism is also a major driver for the passenger market with a fairly equal mix of leisure and business travellers through the airport depending on the specific time of year. Johannesburg is the hub for business travellers in Southern Africa.

ACSA reported that in September 2018, O R Tambo recorded a 0.2 percent passenger growth year-on-year at 1.8 million. Regional passenger volumes grew the most at 1.3 percent
“O R Tambo currently serves approximately 21 million passengers annually through two main terminals and sees more than 220,000 aircraft movements each year,” she said. This figure comprises domestic, regional and international flights that include direct connections to Africa, North and South America, Europe, the Middle East, Far East as well as Australia. 

“As a result of an on-going collaborative decision-making approach to the daily management of the operations of the airport, the airport’s performance is closely monitored by all parties involved in the passenger’s experience from car parking all the way to boarding an aircraft.  This requires a high level of cooperation and alignment between our stakeholders and the Airport,” stated Pityi-Vokwana.

Additional arrivals collection belts will be installed to cater for the increase in passenger numbers over the next three years, along with enhancements to the check-in process that will allow for a more independent self-service suite for passengers to use.

Safety as priority
Pityi-Vokwana impressed upon security at O R Tambo International Airport that has received much attention over the last 18 months. Security within the cargo precinct has been strengthened through continuous efforts of all the stakeholders.

“The cargo handling companies, forwarding companies and the airport have tirelessly worked to reduce security breaches.  There is ongoing support from the highest levels of the airport security team, the precinct users’ private security as well as national law enforcement.  The airport was recently visited by representatives from Airports Council International (ACI) and IATA who were satisfied with the ongoing joint efforts,” she said.

The broad challenges
As the largest aviation hub within the Southern African and Sub-Saharan Africa region, O R Tambo International Airport faces several operational and strategic challenges.  Fortunately, these challenges are rarely faced in isolation and are often approached through broader aviation community forums. 

“Maintaining the high standards of safety and security of an airport of the stature of O R Tambo International Airport will always be of paramount importance. However, this is approached as a shared responsibility with the support and assistance from senior levels of the airport stakeholders and from our partners in the municipal, provincial and national law enforcement,” said the airport general manager.

In order to meet the needs of the users of the airport, ACSA has robust service level agreements with all parties involved in the servicing and maintenance of the resources and equipment at the airport.

Pityi-Vokwana concluded, “It is also important to note that O R Tambo International has to maintain its internationally recognised position as the main hub for the country and the Sub-Saharan region which brings with it the responsibility to provide the connections of people and goods to a global market and remain a driver of regional economic activity.”