KING SHAKA AIRPORT (ACSA): Connecting People, Places, Dreams & Opportunities

South Africans are not flying as much as they could. Freight and cargo suitable for air transport remains on the road. It’s a large problem that is part of a wider economic challenge in the country with a landmass of more than 1.2 million km². Why is a relatively advanced economy, with a challenged road network – the 24^th largest country in the world – struggling to get people into the air? According to Nkosinathi Myataza, Regional GM at Airports Company South Africa (ACSA), infrastructural challenges, public transport access to airports, cost of flying, and lacking cohesion between regional airports is part of the problem.

His responsibility is the following ACSA airports: King Shaka International Airport in Durban, Chief Dawid Stuurman Airport in Gqeberha and King Phalo Airport in East London. Key drivers of economic activity, the country’s airports have the ability to reshape prospects in South Africa. ACSA has set a number of plans in motion to utilise airports and air travel for economic benefit, and in the post-pandemic environment where challenges are exacerbated, it is important to get things right.

“The majority of South Africans are not exposed to the air economy. Just 10% of people are flying,” he says. “The majority, who want to move between Durban and Johannesburg, are driving.”

A one-way ticket on this just-over one hour flight can cost an estimate of R475. Even though this is seen as a fair price, when combined with infrastructural issues, it becomes out of reach for many. Myataza highlights the community of Umlazi, south of Durban. Close to the site of Durban’s former international airport, this town is now around 60km from King Shaka International Airport (opened in 2010). “If you have to hire a car or get public transport to the airport, it will cost around the same as the flight to Johannesburg. In total, this represents a large percentage of a monthly income. If we don’t make public access to the airport more available and cheaper, we will not fill seats on planes.”

ROUTE DEVELOPMENT

The way to drive cost down is to develop routes. By increasing capacity and competition, prices will naturally fall for consumers as businesses look to buy into the market. But there must be a business case to attract airlines. Currently, Lift, CemAir, SAA, Airlink and Flysafair are the only mainstream airlines to make the domestic journey. By investing in airports and marketing correctly, ACSA hopes that the region can become more appealing from a commercial perspective, driving down costs in the long-term.

Myataza says that marketing is important here. “There is a misconception that flying is always more expensive and this is why marketing is significant. For example, when you look at driving from Durban to Johannesburg, when you calculate the tolls, fuel, and time, it can be more costly than flying – especially with no-frills, low-cost airlines.

“Development is essential – we must entice airlines to fly specific routes. The more seats become available, the more the cost becomes competitive. Between Durban and East London there is one flight in a day. Everybody who doesn’t want to drive must take that flight, and that takes up the price. If we develop that route and display a case for a win-win situation for passengers, airlines, and airports, then capacity will increase and we will enable more people to fly.”

An engineer and management professional, with vast experience in the sector, Myataza takes care of ACSA’s Cluster Three. The country was split into regional clusters in a post-covid restructure to ensure that each airport is fulfilling a leading role within the community that it operates.

“We are now consolidating regions by building clusters around the three main international airports in South Africa – OR Tambo, Cape Town, and King Shaka. Cluster one, around OR Tambo, includes Bram Fischer Airport in Bloemfontein. Cluster Two is around Cape Town and includes George, Kimberley, and Upington. Cluster Three is centred around King Shaka with Chief Dawid Stuurman International, King Phalo, and we manage Richards Bay Airport on a five-year contract with the uMhlathuze Local Municipality.”

Developing airports and creating an appealing environment for airlines is a strong priority for ACSA, and thankfully where the vast skills of the company are deployed.

As a state-owned company, ACSA has a developmental mandate around socio-economic transformation while protecting the environment and contributing in building a South Africa that is a capable, ethical and a developmental state. “To do that, we must demonstrate commercial viability, through both aeronautical and non-aeronautical revenue generation. We cannot just be developmental at all costs, we must make money, which in turn will drive the development.” explains Myataza, reminding of the fact that airline routes are big consumers of fuel and salaries, but each aircraft that touches down brings fresh opportunities.

One priority is to bring back more international tourists, much of which fell away throughout the lockdown periods across 2020 and 2021. Through Durban Direct, a special provincial routes development committee dedicated to bringing in direct flights to King Shaka International Airport, domestic and international connectivity to the province has been gradually restored. Similar airlift initiatives are taking route across the cluster and nationally.

“The committee consisting of Dube Tradeport, ACSA, Invest Durban, Trade and Investment KZN, Tourism KZN, Durban Tourism and the provincially through the Department of Economic Development, Tourism and Environmental Affairs, among others, have done a lot to recover traffic.

“The routes from Durban to Heathrow and Durban into Namibia were popular pre Covid, but they went down and did not come back.

“However, internationally, we have regained Qatar, Emirates, and Turkish Airlines, and recent capacity added from Proflight Zambia – flying direct flights between Durban and Zambia. We also celebrate the enhanced connectivity with the inaugural launch of Royal Eswatini Airways. Our collaborative efforts have seen significant inroads in boosting tourism, we trust that this will lead to full recovery to pre-pandemic levels,” details Myataza.

He adds that discussions are underway with agencies in the USA who are hoping to spread arrivals across the three clusters allowing American travellers a wider number of options in Africa. “They noticed that most US travel is to OR Tambo and Cape Town, but the OR Tambo numbers are dropping, and more are arriving in Durban. They are looking at whether we can start discussions with Delta and United and we are working closely to make that happen.”

In the shorter term, ACSA has focused heavily on African partnerships to drive capacity. The company is monitoring tourism and business in several key markets to provide data on how and where to build and develop routes.  

“We were looking at Harare in 21/22, and we are looking at Nairobi in 22/23, Addis Ababa in 23/24, and then Kigali. We are also keen on, Gaborone, and Mauritius. We also want to revive the London Heathrow flights from Durban alongside British Airways.”

BRIGHT HORIZONS

From King Shaka, and the other clusters, economic prosperity must flow. This is not a CSR campaign from the airport itself or ACSA – this is mandate from South Africa. To ensure this, ACSA has set horizons which guide its short, medium, and long-term goals, and Myataza describes the plans as sustainable and tactical.

“We set horizon one, up to 2025, to run airports and do what we do, being the best at it. Horizon two, 2025 to 2030, we are looking at developing airports, starting internally in SA, then moving to Africa, then going global. The third horizon is about going forward with innovation. 2030 and beyond is about growing our footprint and going forward to where we want to be. Those three horizons will overlap as business improves, and opportunities avail themselves.”

In the current phase, he hopes to link the airports in his cluster like never before, not only with each other but by integrating with road and rail, and focusing on cargo as well as passengers, to deliver an all-encompassing offering for the economy.

“We run airports – we have that skill and intend to build that skills base further,” he confirms. “How we can link these with other areas, especially Social Economic Zones (SEZs) at Richards Bay, Dube Tradeport, East London, and Ngqurha in Gqeberha is critical. We are also in discussion with Mkuze Airport which is strategically located close to game reserves and other tourism assets in the KwaZulu Natal region. It would take away the need for people to fly to OR Tambo and then drive to Mpumalanga. We are also keen on developing Newcastle Airport where a lot of cargo remains on roads – there is a lot of congestion, accidents, and security risks. We want to work in partnership with SANRAL and Transnet, as guided by the National Department of Transport among others, to understand what should be on the rail, what should be on the road, and what could move to the air. An integrated approach is essential and will relieve pressure on the roads where the number of trucks is not sustainable.” 

In KwaZulu Natal and the Eastern Cape, there are several smaller, regional airports and airstrips that feed into the bigger picture. By developing these sites, ACSA can help to build deep value chains and lasting bonds in areas where commercial activity is much needed.  

“Regional airports cannot be characterised only by the level of traffic they have or their hierarchical position in the airport network. They must be measured on the contribution they have in the regional economy,” Myataza reiterates.

“We are looking at the Eastern Seaboard and how we can further complement connectivity of the areas with others by air. The infrastructure is challenged, and there are clear opportunities so we as ACSA need to understand what is viable in areas such as Port St Johns, Port Edward, Margate, and Mthatha.”

As part of the first horizon in ACSA’s long-term strategy, the running of key airports will help to support further outreach and rollout as Horizon Two comes around in 18-months’ time. Making airports nodes of activity and not just locations where people fly to and from is important. Adapting the wider ACSA business to take advantage of digital opportunities will also help with cost reduction, efficiency, and ease of doing business, not just digitising for the sake of it. The destination of all of the various strategy and initiatives is a globally recognised business that has an impact on the lives of everyone it touches. Sky high thinking? According to Myataza, it is all very achievable.

“While we have these strategies, we are also not oblivious to the challenges and emerging risks around us, these range from global developments including apparent realignment and repolarization of geo-politics, right up to our own local risks like insecurity of utilities, notable power and water, skills deficit, lacking social wage and other key country risks. Our risk response is focussed not on only mitigating these risks, but also identifying opportunities that could present themselves to develop and grow the industry and integrate the efforts with others for a better country and better continent.

“If you look back in centuries, cities used to grow around railway stations, highways, and sea-ports, but we are now moving towards air transport and that is where modern cities thrive,” he says.

“Everything we do is grounded in our vision and mission, guided by a set of values – PRIDE. P is passion, R is results, I is integrity, D is diversity, and E is for excellence is everything we do, and bound by ethics.

“Our value proposition is simple – we connect people with people, people with places, people with dreams, and people with opportunities.

“With this always front of mind,” he says, “everything we aim for quickly becomes realistic.”

COVID RECOVERY

The work at King Shaka, and across the country through ACSA, will be vital in restoring South Africa as a leading tourism destination of the continent and the world. 42 million flights moved around the world in 2019. The pandemic slashed these figures by 60% in 2020 and 49% in 2021. In the South African economy, the air transport industry, including airlines and its supply chain, supports R100 billions of GDP. Spending by foreign tourists supports a further R75 billion of the country’s GDP. Recovery from the pandemic downturn is vital, and this is why ACSA and its airports have planned a journey forward meticulously.

“In 2021/22, we had an increase of 41.9% in Durban, 60.3% in East London, and 44.6% in P.E. In 2022, the landings continued, and this year, we have seen a great improvement. Most of the recovery has been riding on the back of domestic flights. King Shaka, recovery has been slower when compared to OR Tambo or Cape Town – 78% and 54% domestics and international respectively,” explains Myataza.

He adds that the pandemic was part of a wider difficult situation that impacted Durban and the cluster unlike any other.

“The KZN economy had a triple whammy impact – Covid, social unrest, and floods. We started during the floods – while we had a lot of damage at the airports – to go to communities with aid and we started to revive community projects as quickly as possible. We provide computers to schools, and we build science facilities – we have to ensure schools recover as quickly as possible and despite us not having the finances, we made sure we were part of the recovery of the province.

“What compounded the slow recovery, alongside social unrest and flooding, was the liquidation of the group that owned Kulula. We lost 35% of the market between airports in our cluster. There was not enough capacity to fill seats and that is why our growth has been behind the others. We have had FlySafair, Lift Air, and CemAir come into the market, and that has helped us on the road to recovery.”

The Covid impact was dramatic. In the first year, ACSA lost R2 billion. In 2021, the loss was R1 billion. “A lot of activities and initiatives were put in place just to survive – many airports were going under and we tried to do everything to look after employees,” says Myataza.

Importantly, the company survived without a bailout thanks to its mitigating measures, resilient and dedicated people and processes, and strong underlying culture of sustainability. Diversifying operations, partnering with intermodal collaborators, ensuring efficiency, and increasing numbers will come as the ACSA strategy plays out.

“We see ourselves as engines of economic development and integrators of economic opportunities,” says Myataza. “We see airport economies that connect people as the future.”

DIRECT DURBAN DEVELOPMENT

For tourists, Durban has the weather, beaches, commerce, and bright South African welcome. For business, King Shaka International is open to all opportunities. Its position and facilities are world-class, and the growing connectivity with regional hubs will only further appeal to local businesses. As the gateway to Africa, and the most advanced economy on the continent, there is no doubt that South Africa and Durban will continue to thrive economically from an accessible and modern airport network.  

“For KZN, pre Covid, we had a R1.6 billion impact on the economy, directly and indirectly supporting 3177 jobs – a 0.2% contribution to provincial employment. In the Eastern Cape, our contribution was R4.4 billion, with 10,038 jobs supported and a 0.8% contribution to provincial employment. Covid then hit and the environment changed quickly,” says Myataza, aiming for a return and improvement on these contributions.

Despite much turbulence, operating against a challenged economic backdrop, King Shaka International Airport continues to build resilience and sustainability in its community, based on the national strategy in place at ACSA. Few others around the world could demonstrate ability to battle through such harsh conditions, and this places the company in a strong position when it looks to the long-term horizon.

“Our vision is to be the most sought-after partner in the world for the provision of airport management solutions by 2030. That in itself says that our focus is not just South and southern Africa, but we want to position ourselves as a global entity in the next seven years. Our mission is to acquire, develop, and manage world-class airports and businesses for the benefit of all of our stakeholders, for the socio-economic development of South Africa,” concludes Myataza.