SHAUN READ: Concept of air hubs may not fly at SA's airports
THERE is support in some quarters for the creation of an "aerotropolis" around Cape Town International Airport. This follows the announcements in September last year by the Ekurhuleni Metropolitan Municipality, and in May this year by the Dube Trade Port Corporation, of their respective intentions to transform the areas around OR Tambo International and King Shaka airports into aerotropolises.
The concept of an aerotropolis has been around since a skyscraper topped off with a commuter airport was first proposed by Nicholas DeSantis in the November 1939 issue of Popular Science. In essence, an aerotropolis, is nothing more than urban infrastructure planned around the activities of an airport.
The chief proponent of the modern concept of an aerotropolis is Prof John Kasarda, who revived the concept in the late 1990s and who appears to be a central figure in motivating and promoting both the OR Tambo and King Shaka aerotropolis developments. Kasarda believes airports are "the new central business districts of the post-industrial economy". Kasarda is not without his critics but is at least candid about the fact that he does not always get it right. According to an article in the Wall Street Journal in 2007, Kasarda is reported to blame himself for the failure of an industrial park and free-trade zone he proposed for an underused airfield in North Carolina. The development is reported to have flopped because of its remote location, but not before consuming $85m in state and federal grants over 15 years and creating just 200 jobs.
The North Carolina development is a cautionary tale for those advocating aerotropolises. Studies have shown that the most successful aerotropolises are linked to airports with a high level of connectivity - that is, the number of markets served multiplied by the frequency of reaching those markets. This requires high numbers of aircraft movements. Prime examples of functioning aerotropolises in the US are airports such as Dallas-Fort Worth in Texas and Dulles in Washington DC, which serve as major airline hubs. Other examples of model aerotropolises are those that host logistics hubs for companies such as FedEx and DHL. Large numbers of aircraft movements at these airports mean high freight capacity, which attracts industries dependent on air transport. It is the availability of freight services rather than passenger numbers that drive aerotropolises.
The question is whether any of SA's airports have the connectivity and traffic to sustain a viable aerotropolis? According to the Airports Company SA (Acsa), in 2011-12, Cape Town International had 97935 aircraft movements, King Shaka had 55194 and OR Tambo had 212580. Even the combined total of these aircraft movements would not place SA in the top 50 airports in the world.
In addition, SA is not surrounded by major markets - these are 10 to 16 hours flying time away. This compares unfavourably with distances to markets in the US and Europe. Even in Africa, the more lucrative markets of north and west Africa are closer to Europe than to SA.
Looking specifically at the proposed Cape Town International aerotropolis, a few important factors affecting connectivity and air-traffic flows have been ignored: airlines already complain that the high airport taxes and landing fees imposed by Acsa are stifling competition and discouraging higher flight frequencies to all of SA's major airports; current regulations prohibit international carriers from carrying domestic passengers between airports in SA; foreign ownership of airlines in SA is restricted and only airlines controlled by South African residents can originate flights out of SA; and rising fuel costs mean airlines look for the most direct fuel-saving routes.
In addition, diverting international flights to Cape Town makes no sense if it will add flying time; SA's major exports and imports are commodities more suited to rail and sea freight; worldwide passenger numbers are decreasing because of technological advancements allowing for teleconferencing and reducing the need for business travel, which is a mainstay of most airlines.
Those seeking to fund and implement the aerotropolis concept in SA, using taxpayer money in the process, would do well to do their own homework on the viability of the concept of the aerotropolis rather than get caught up in the hype created by its proponents.
. Read is an MBA graduate of the Gordon Institute of Business Science and a director of Read Hope Phillips Attorneys.
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