South Africa must reform harmful immigration policies and reduce taxes and charges in order help its aviation industry grow in the coming years.
A new report from the International Air Transport Association (IATA) focused on the economic value of air transport and tourism to South Africa says that in addition to these two challenges that must be addressed the country also needs to establish a harmonized strategic approach to policy-making with transport and aviation central to economic planning.
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The IATA study suggests there are opportunities for significant expansion over the next 20 years if key policy reforms are made.
It also reveals that in 2017, 20.9 million passenger journeys were made to, from and within South Africa, with aviation and tourism representing $9.4 billion in gross value added.
The industry accounts for 3.2 percent of South Africa’s GDP and supports 472,000 jobs, according to. IATA.
Over the next 20 years, the South African market could more than double in size, according to IATA, resulting in 23.8 million additional passenger journeys, over 372,000 more jobs, and a total of $20.2 billion in GDP by 2037.
“The results of the study are a reminder that robust air connectivity unlocks significant economic and social benefits. I call aviation the business of freedom. Air transport creates jobs, facilitates tourism, supports international trade and is an engine of economic activity,” said Alexandre de Juniac, IATA’s director general and CEO. “With more than 20.9 million passengers departing and arriving from airports in South Africa every year, there’s good reason to be proud of all that aviation has achieved here.”
De Juniac added that while the numbers are robust IATA is concerned by the Q1 2019 4.4% and 3.6% contractions in the transport and tourism sectors, which reflect uncertainties and diminished confidence.
“Government policy reforms to promote business, trade, investment and tourism are essential to make the most of air transport to the benefit of the South African people and economy,” he said.
Recent continental developments also hold promise for South Africa, according to de Juniac.
“The implementation of the Africa Continental Free Trade Area and the accompanying Single African Air Transport Market intended to underpin it, are initiatives that will benefit South Africa and other countries with business and trade enabling policy and legal frameworks,” he said.