The Importance of Airports to City Economies

June 29, 2017
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With the recent news that the Department of Environmental Affairs has approved the new runway realignment for Cape Town International Airport, there is an opportunity to reflect on the importance of airports to city economies.

In an interview with News24, Deon Cloete (General Manager of Cape Town International Airport), explained, “We are indeed pleased to have reached this milestone within the environmental assessment process. It has required a great deal of planning and continuing engagement with communities to get to this point. This runway project is not only about the growth of the airport, it’s about unlocking the growth potential of Cape Town and the Western Cape and we are pleased to be able to further contribute to the development of the region.”

Research from Duke University in the USA has revealed that airport development is linked to economic development. It provides insight into this complex interplay and the implications it can have on new airport development. The study’s author explained that much of the discussion on the relationship between airport and economic development surrounds four key sub-topics: public finance, economic development, transportation economics, and airports in general.

“Economic development is often linked with infrastructure development, which means that airports are expected to further the development of the economies of the surrounding regions. Transportation in general affects the development of cities, with air travel having a large stake in both short- and long-distance transportation,” it concluded.

According to a study undertaken by Oxford Economics, with the assistance of International Air Transport Association (IATA), air transport to, from and within South Africa creates three distinct types of economic benefit. “Typically, studies such as this focus on the ‘economic footprint’ of the industry, measured by its contribution to GDP, jobs and tax revenues generated by the sector and its supply chain”, the document explains. “But the economic value created by the industry is more than that. The principal benefits are created for the customer, the passenger or shipper using the air transport service”.

“In addition, the connections created between cities and markets represent an important infrastructure asset that generates benefits through enabling foreign direct investment, business clusters, specialisation and other spill-over impacts on an economy’s productive capacity. As a whole, the air transport industry has a substantial economic impact, both through its own activities and as an enabler of other industries.”

By facilitating tourism and trade, airports and air travel generate economic growth, provide jobs, increase revenues from taxes, and foster the conservation of protected areas. The air transport network facilitates the delivery of emergency and humanitarian aid relief anywhere in the world, and ensures the swift delivery of medical supplies and organs for transplantation.

Airlink CEO and Managing Director, Rodger Foster, has been quick to capitalise on this, and Airlink has now expanded its reach to include a third daily flight operating midmorning between Cape Town and Windhoek, a new route between Pietermaritzburg and Cape Town, and a daily direct flight between Cape Town and Victoria Falls, Zimbabwe.

With more than a century of commercial air travel under the belt, and an air travel industry that is on an upward trajectory, airports are the new harbours of economic growth and development and, as such, have a critical role to play in both the macro- and micro-economy of South Africa.

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