The push for the widespread adoption of environment-friendly air travel is expected to gather momentum this year as the airline industry aggressively implements measures to curtail carbon emissions.
The industry, a key driver for tourism and economic growth, has largely emerged from what was its darkest period as the pandemic wreaked havoc across the world. But it is under huge pressure to do more to reduce aviation’s’ contributions to the warming of the planet, including fast-tracking the adoption of more-sustainable fuels.
Another notable trend for the year is likely to be the surge in demand for airline and airport staff, especially pilots, fuelled by the continued growth in air travel.
In all this, there is reason to be optimistic about the future of air travel in South Africa and across the world as we look ahead to key industry themes that will likely dominate 2023.
Sustainable aviation is non-negotiable
In recent years the spotlight has been placed directly on sustainability in the aviation sector. Increased global pressure to reduce carbon emissions from air travel in conjunction with the Paris Agreement on global warming led members of the International Civil Aviation Authority (ICAO) and the International Air Transport Association (IATA) to agree to a resolution of achieving net-zero carbon emissions by 2050. Although the resolution was only passed in October 2022, there has been a significant focus on developing more sustainable technology and reducing the overall environmental impact of flights.
The adoption of Sustainable Aviation Fuels (SAFs) - biofuels that have similar properties to normal jet fuel but with a smaller carbon footprint - is one measure that has gained major traction as several airlines have started incorporating the more environmentally friendly fuel in their operations with some carriers even operating their first 100% SAF-operated flights. Airports need to play their role here by providing the necessary infrastructure to supply SAF in a cost-effective manner. A recent study by the World Wildlife Fund (WWF) indicated that South Africa has the potential to become a major producer – and potential exporter – of SAF in future.
Beyond technological developments, regulations are also beginning to shift in favour of greener choices. The European Union recently approved French lawmakers’ move to ban short-haul flights in the region, where a decent rail alternative is present – provided the connection is two and a half hours or less. Regulations such as these will become more common-placed, especially in developed countries and could have consequences for countries such as South Africa if related regulations apply to long-haul flights in future.
Global capacity will remain constrained throughout 2023
It has become clear that the aviation industry has achieved a robust recovery following the COVID-19 pandemic. This has however led to many unprecedented issues never experienced before, on such a scale, in the industry. Foremost in mind being the infrastructure constraints and staff shortages experienced by both airlines and airports around the globe.
Some of the major airports in Europe failed to re-employ the necessary staff to meet the passenger demand during the peak season and maintain full operations. This led to airports reducing the number of flights allowed at the airport as they struggled to cope with soaring demand. Furthermore, airlines are facing a global pilot shortage. This is mainly due to excessive layoffs during the pandemic, ageing workforces, fewer new pilots entering the market, and increased barriers to entry (including the cost of training). As demand for air travel continues to rise, it is apparent that the demand for pilots will outstrip the supply in most regions – the situation could even worsen over the next decade. Leaders in the industry expect that there could be a shortage of nearly 80 000 pilots by 2032.
On the local front the demise of Comair has led to capacity constraints in the domestic market. The remaining airlines are incrementally adding more aircraft, and in the longer term the market will likely correct itself and stabilise.
The planned terminal expansion and runway realignment for Cape Town International Airport (CTIA) was placed on hold when the pandemic started and with international passenger volumes close to pre-pandemic levels in December 2022 already, these capacity projects should be reviewed as part of the regulatory permission process and be brought forward to enable future development and growth at CTIA.
External factors could dampen air travel demand
Sector instability will continue as global economic uncertainty and record-high inflation indexes are likely to decrease the demand for leisure travel. Geopolitical conflict in Europe is a serious risk factor for the continued growth of air travel in 2023.
The conflict has had a resounding impact across the globe exacerbating rising labour, fuel and material costs alongside the ever-present emerging energy crisis. With high oil prices, the cost of fuel has surged to about 35% of the aviation industry’s total operating costs which has forced airlines to keep airfares high. Although the wealthy are expected to continue flying as is seen in the latest trend of carriers filling up from the front, budget travel demand from the general population could decline as households focus on covering basic needs.
It is possible that a prolonged downturn, compounded with rising costs, will dampen demand in 2023. However, should demand remain strong, we are likely to see the continuation of the post-pandemic air travel recovery through this year with passenger numbers surpassing pre-pandemic levels. Low cost-carriers are well-positioned to weather these economic shocks and could even see an increase in demand as consumers are forced to consider more affordable flight options.
Air Cargo continues to gain traction
After experiencing exponential growth in 2020 and 2021, IATA predicts that global air cargo volumes will decline by 4% year-on-year in 2023. This already follows an 8% annual drop in global air cargo volumes in 2022. Although demand is levelling out, freighter deliveries are reaching peak levels with the rolling two-year average at its highest since 2012. However, the delay between ordering and delivery of aircraft will mean that air cargo is likely to see faster growth only once capacity is added. It is also important to note that continued global supply chain disruption may adversely affect the sea-shipping industry and present an opportunity for even further air cargo growth in suitable product categories. The sector is also expected to continue reaping the benefits of a booming e-commerce market since the start of the pandemic.
Western Cape international air cargo volumes is expected to exceed pre-covid levels in 2023 as the increase in direct flights to Cape Town has significantly boosted the available belly-freight capacity on international flights. Belly-freight capacity refers to the storage space in the underside, or belly, of a passenger aircraft.
Tangible implementation of open skies in Africa will improve connectivity
The Single African Air Transport Market (SAATM) agreement is a flagship project of the African Union Agenda 2063 which is aimed at creating a single, unified air transport market in Africa to advance the liberalisation of civil aviation and act as an impetus to the continent’s integration agenda. With the SAATM Pilot Implementation Project (PIP) launched on 14 November 2022, supported by the participation of 17 countries including South Africa, the decision to "open skies" in Africa is expected to translate into greater options for travellers and lower fares.
Although Cape Town can expect growth from African markets, especially those that are connected by direct flights, more needs to be done to make travel affordable and easy for passengers. The implementation of e-visas or visa-on-arrival programmes is one of the ways in which travel can be boosted between African countries and is a key requirement for the successful implementation of SAATM.
It’s also vital that foreign intercontinental carriers should not unnecessarily be limited in operating flights into African destinations, through bilateral restrictions or policy interventions, as the influx of passengers provides economic stimulus and job creation opportunities in the destination. A delicate balance therefore needs to be achieved between promoting the African agenda and allowing intercontinental tourism and trade to prosper.
Cape Town Air Access will continue its mission of improving connectivity and adding capacity to the Western Cape air route network to drive tourism and trade growth in the province in 2023.