CAASA Aviation Activity Index (CAAI) – 4th Quarter
Embargo: 21 February 2020 (10:00)
Introduction

The Commercial Aviation Association of Southern Africa (CAASA) is proud to announce the results of its composite index of aviation activity for the 4th quarter of 2019.

The CAASA Aviation Activity Index (CAAI) is based on 26 different indicators and
provides an objective & balanced gauge of economic activity in the commercial aviation industry. Due to the short-term volatility inherent in purchasing and selling aircraft, where
units are small, but the currency values are very high, the CAAI includes a trend that is based on a 4-quarter moving average, as illustrated by the graph.

Summary of key trends depicted by the CAAI for the 4th quarter of 2019:

1. The index value increased substantially from the 3rd quarter to reach a level of
   130.7, which represents a 31% increase in commercial aviation activity since the
   base period (1st quarter of 2014). This is, however, considerably lower than the
   all-time record that was attained in the 4th quarter of 2018, namely 204. One of
   the reasons for the sound recovery of both the index value and the trend is
   related to the highly successful 2018 Africa Aerospace & Defence (AAD)
   exhibition, which was the first AAD since the election of a new executive
   administration in South Africa, which is committed to pragmatic policies to
   encourage economic growth, whilst also combating the scourge of corruption.

An encouraging feature of the latest CAAI results is the fact that, after adjustment
for inflationary effects, the commercial aviation industry has outperformed the
South African economy over the past six years.

1. It is also apparent that the slump in aviation activity that lasted for eleven
   quarters (until the 3rd quarter of 2018) has been reversed. Aviation remains a
   highly capital intensive sector and it has been under some strain as a result of
   policy uncertainty, low levels of business confidence, lethargic economic growth
   and high interest rates.
2. Unfortunately, the recovery in the trend of activity since the 3rd quarter of 2018
   has been accompanied by a higher level of volatility, with only ten of the 26
   different indicators recording gains over the 4th quarter of 2014.
3. A particular point of concern is the poor performance of air traffic movements
   (ATMs) at most of the airports managed by the Airports Company of South Africa
   (ACSA). All nine of these airports recorded lower ATMs in the 4th quarter of 2019,
   compared to the 4th quarter of 2016.
4. In contrast, the six non-ACSA airports included in the CAAI, recorded consistent
   growth in ATMs until the first quarter of 2019, but a noticeable slump has since
   set in. It is quite clear that the stringent visa regulations that were introduced in
   2015 by the Department of Home Affairs under then Minister Malusi Gigaba have
   taken their toll on both the South African tourism industry and the commercial
   aviation industry.
5. In the 4th quarter of 2019, the value of aircraft spares imports reached its second
   highest level on record, namely more than R1.1 billion.

Total aircraft imports (unladen mass of under 15 tonnes) amounted to R487
million in the 4th quarter, slightly lower than the export figure of R554 million.