South Africa

Business Maverick

Air routes: Cape Town reaches for the skies

Air routes: Cape Town reaches for the skies
Tim Harris, CEO of Cape Town economic development agency Wesgro. (Photo: Gallo Images / City Press / Denvor de Wee)

Economic development agency Wesgro has enabled a remarkable upturn in air traffic to the Mother City.

In 2012 Cape Town was losing international flights like SAA loses CEOs. SAA had suspended its 20-year-old Cape Town-London route, Spanish airline Iberia suspended flights to the city, Lufthansa cut some flights, and in 2015 the then funky Virgin stopped flying to Cape Town.

These were devastating blows to the Mother City. International air access is vital to unlocking growth – in tourism, trade and foreign direct investment. In 2015 Cape Town was dependent on four international carriers, which like the national carrier, did not see the city as strategic to future plans.

For Tim Harris, newly minted CEO of Cape Town economic development agency Wesgro, the problem could not be solved alone; local, provincial, and national government agencies, together with business, had to work collectively to solve the problem.

Fast forward to 2019, and the city has welcomed nine new international airlines, 14 new direct routes and 19 route expansions, resulting in more than 1.5 million two-way seats being added into Cape Town International Airport.

The latest cherry on the cake is United Airlines, which will begin flights to and from New York.

What changed? If anything, South Africa’s economy has worsened since 2015, unfriendly visa regulations have harmed the tourism industry, and a globally televised drought scared away tourists in 2017/18.

It’s not a case of hope and they will come, says Paul van den Brink, project lead for Cape Town Air Access, (CTAA), the partnership initiated in 2015 by Wesgro and supported by the Western Cape Provincial Government, the City of Cape Town, ACSA, Cape Town Tourism, SA Tourism, and private sector partners like Naspers.

Cape Town was not on the map. No one attended events like World Routes, which every airline, airport and aviation stakeholder attends annually. Now we engage with the right decision makers.”

CTAA’s mandate was to attract four new carriers by 2019. The results have gone so far beyond this that a new agreement, with new targets, has been signed.

Van den Brink makes the job sound easy. Yet it took his team two years to convince United Airlines that returning to Africa to fly the New York-CT route would be viable and profitable.

Often the process starts at global conferences like World Routes.

It’s like speed dating,” says Deon Cloete, GM of Cape Town International.

Each meeting is 20 minutes with 10 minutes to reach the next. Just having a beautiful mountain is not enough. You have to talk loads, yields, trade and cargo and how this will support the airlines business case. If you cannot persuade the airline that your route is profitable and sustainable they will look elsewhere.”

Cape Town’s growing fin-tech sector, coupled with the presence of global operators like Naspers is attractive to airlines who obviously want to fill seats and Naspers has come on board as a sponsor and partner.

Data proves that increased international air traffic and access have a direct impact on economic growth, and increased jobs and decreased unemployment. These are challenges we believe cannot be solved by government alone and are best addressed through public-private partnerships,” says Anika Ebrahim, corporate impact director, Naspers.

CTAA has accelerated the dream of a connected Africa. There are now four new African airlines flying in and out of Cape Town: Angola’s TAAG, Kenya, Ethiopian and RwandAir. This means eight African cities are directly accessed from Cape Town.

Tourists can fly Cape Town-Victoria Falls-Nairobi-Europe,” says Van den Brink. The same applies to business travellers. In May 2018 Rwanda Air opened its Kigali-Harare-Cape Town route. Passenger uptake has grown by 50%, double the average rate, he says.

The Western Cape market is also being opened up to Latin American travellers who fly from Rio de Janeiro or Sao Paulo via Luanda.

Opening up travel routes stimulates the economy beyond tourism. Angolans come to Cape Town on shopping and medical trips. Western Cape wine producers are exploring opportunities to export wine to Angola. South Africa is already the second biggest wine exporter into that country after Portugal.

In November 2018, Cathay Pacific started to carry fish and fruit and other perishables to Hong Kong. While there are no cargo-only flights yet, there is interest. To date, the CTAA initiative has added R6-billion to the local economy, according to research by Wesgro. The opening up of the New York route – and by extension, the North American market – will be a further “game changer” says Van den Brink.

Aircraft technology has also had something to do with the success of the initiative.

New planes like the Boeing 787 Dreamliner and the Airbus A350 are fuel efficient and Cape Town became ideally positioned for these long-haul flights,” he says.

Another consequence of the increased traffic is that Cape Town International has embarked on a R7-billion expansion project that will see a new runway being built together with extensive upgrades to the domestic and international terminals.

When we completed the expansion ahead of 2010 we thought it would last forever,” says Cloete.

Construction is expected to begin early in 2020 and will take five years to complete.

While the CTAA has achieved what it was mandated to do, the partners have recently signed another MoU, committing to a further three years.

The goal, Van den Brink says, is to protect and grow the current routes, while closing the gaps in the route network. A direct CT-Maputo flight is one obvious gap, another is CT-Casablanca, the largest city and commercial hub of Morocco.

This is an important hub, with good connections into the US, North Africa and Southern Europe. We have witnessed good growth in arrivals from Egypt and Morocco despite the lack of non-stop connectivity to Cape Town. This shows that we need better connections between Cape Town and North Africa and the unserved markets in West Africa.”

The Cape Town initiative is not in competition with the rest of the country. CTAA is advising the Nelson Mandela Bay Chamber of Commerce on route development and network improvement; the Kruger Mpumalanga International Airport to develop its air route network, and informally with Gauteng, and of course KwaZulu-Natal which pioneered route development in South Africa.

Everyone understands that there is a bigger picture,” says Cloete, “and the model works.” DM


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