Address at the Airports Company South Africa (ACSA) year end financial results by Jeff Radebe-MP

Programme Director, Themba Khumalo,
Chairperson of Airports Company South Africa (ACSA), Franklin Sonn,
ACSA CEO, Monhla Hlahla,
ACSA Finance Director, Brooks Mparutsa,
Representatives of the aviation industry,
Distinguished guests,
Members of the media,
Ladies and gentlemen

One of the most frequently asked questions in our country today, especially to government, is whether or not our country will have the necessary infrastructure and services to facilitate the 2010 soccer world cup. To some extent, this question has been largely answered by the numbers of stadiums being built across the country, as well as new investments in transport and hospitality facilities.

While this is a useful question, the more important question in government's mind is whether in leveraging the 2010 World Cup, South African institutions will generate infrastructure developments that are sustainable and value adding beyond 2010. It should be obvious that I am pleased to officiate at the release of another set of good results from Airports Company SA (ACSA), knowing very well that one of the key factors underlying these good results is consistency in delivering sustainable and needed airport infrastructure and services for the aviation industry to our country and region.

Ladies and gentlemen, Airports Council International (ACI) estimates that global air travel has continued to grow, experiencing a 4,9 percent average growth rate in passenger numbers in the calendar year 2006. In this year, the regions of Africa, Asia/Pacific and the Middle East led the world with average annual percentage growth rates of 7,8 , 8,5 and 12,6 respectively. Of significance for us today, is the fact that the passenger growth rate of ACSA's network of airports reached 11,3 percent in the same period, and is expected to grow at an average growth rate of 8% into 2010.

While it is well known that transport infrastructure is the heartbeat to economic development and social advancement, I want to believe that this audience understands that traffic growth rates in the aviation sector are a function of levels of economic growth (GDP).

The positive growth in passenger numbers is largely as a result of the domestic passenger market, which was powered by a stable economy and growth in GDP levels to around 4 percent.

Let me give you some more detail on the level of passenger growth rates experienced by the ACSA network of airports in the last financial year, excluding the obvious growth rates of OR Tambo and Cape Town International airports.

Basically ACSA is handling 16,5 million departing passengers annually and is currently experiencing an annual growth of 10,8 percent. For instance, during the year under review we have seen a huge growth in smaller airports such as the:

* Port Elizabeth Airport which grew by 10,4 percent on average, reaching total passenger volumes of 1,4 million passengers for the year. The current consolidated terminal capacity is 2 million passengers.

* East London Airport grew by 16,7 percent on average, reaching a total passenger volume of 698 000 passengers for the year. The current consolidated terminal capacity is 700 000 passengers.

* Bloemfontein Airport is today the fastest growing airport at an average growth rate of 42 percent in the year under review, due to the entry of the low cost carrier Mango. The airport facilitated 464 000 passengers in the year under review, through a terminal with the capacity to handle 360 000 passengers.

* Kimberley Airport on the other hand, grew by 25 percent and handled 132 000 passengers during the year under review.

It should be clear that the entire network has experienced good growth in the year under review, confirming that the challenge to us as a Ministry and Department of Transport and to ACSA is how we provide infrastructure sustainably and timely throughout the network. We need to meet this real demand, which is clearly beyond the requirements of the 2010 soccer world cup, whilst maintaining ACSA's and the broader aviation industry's economic viability.

I am pleased that in the year under review, ACSA invested up to R1,7 billion in infrastructure development to kick start a programme that will see its infrastructure capacity improved by the event of the world cup. As part of this investment, a terminal upgrade for George airport was successfully completed, enabling the airport to grow its terminal capacity to 800 000 passengers a year.

ACSA has committed a total of R19,5 Billion for airports upgrading including the Greenfield La Mercy Airport in Durban. We are currently awaiting the Record of Decision to start working on this project.

In the medium term, I would like the management and Board of ACSA to continue focusing on the following important issues underpinning the company's ability to deliver infrastructure sustainably:

* Long term airport planning to ensure timely responses to growth in demand and integration with local and national government transport planning imperatives. Airports do not exist in isolation and require integrated transport modes to ensure efficiency of operations for the benefit of the users.

* Investment in people and recruitment of the right skills to assist the company manage the growth in demand and supply of infrastructure.

* Research on operational policy and technologies to make our airports world class, accessible to our people and meeting the standards and requirements of its clients, the passengers, airlines and visitors to the airports.

* Global benchmarking to ensure that our airports remain world class and leading in critical indicators, which will support our economy's attractiveness for tourism and investment.

B* road based Black Economic Empowerment to ensure increased participation by the previously disadvantaged, in the benefits of the good growth being experienced by the industry.

Let me thank the Managing Director, Monhla Hlahla and her energetic and diligent management team and staff. I hope you and your team will be in the position to meet tough requirements to deliver the planned infrastructure on time and cost effectively for World Cup 2010 and beyond.

As well, please allow me to thank Franklin Sonn and the previous Board of Directors for these excellent results and performance against set targets. May you and the new Board continue to focus on delivery of our commitments for efficiency and improvements of customer service levels.

Thank you

Issued by: Department of Transport
16 August 2007