24 Sep 2014

The executive director of Special Economic Zones, Botswana Investment & Trade Centre, Mr Lonely Mogara has called on Civil Aviation Authority of Botswana (CAAB) to improve the standard of airports in the country to fully explore non-aviation revenue streams in the country.

Mr Mogara said non-aviation revenue streams have become a key figure in measuring airport’s performance hence the need to change local airports to a multi service point to diversify and grow revenue streams. 

Briefing aviation stakeholders about opportunities for strategic partnership to generate non-aviation revenue streams in Botswana, he said non-aviation revenue streams help increase the bottom lines of participating companies and propel economic diversification.

Mr Mogara observed that there were minimal business activities in airports, low revenue streams, unattractive investment climate, no clear policies aimed to attract strategic partners with objectives to ignite non-aviation revenue streams.

He also pointed out that in Botswana, the government lead airliner hence the need to involve private sector participation and also limited inclusion of non- aviation revenue streams from the planning of airports and that there no international routes to big economies.

Mr Mogara said airports should be more attractive to meet demands of travellers adding that ‘tastes and demands of aviation travellers and those of their support structures have transformed designs for airports’.

He said demands manifest themselves into business opportunities such as banking, advertising which gives life to the airport due to colorful adverts on the walls and pathways. Other business opportunities mentioned include taxi systems, conference facilities, restaurants, hotels, casinos, leisure activities and shopping malls.

He indicated that the nature and designs of airports had been drastically transformed by the demands of their clients. Modern airports do not only provide infrastructure for airlines services, but have evolved to sophisticated market entities with diversified revenue streams, he added.

Other regions aviation charges are still important revenue source but are no longer core due to the need to diversify the revenue stream because of rising competitiveness; ballooned creativity from competitors and less control of aviation sector by governments, he said. 

In addition, he said passengers are no longer the center piece of revenue growth adding that airports have changed to a multi service point to diversify and grow their revenue streams. 

Mr Mogara cited OR Tambo International Airport in Johannesburg which he said was the busiest airport in Africa and the air transport hub of southern Africa. He said the airport caters for 19 million passengers a year and it plays host to more than 40 airlines and is one of the few airports in the world that has direct, non-stop flights to six continents.

The new terminals offer an array of hotels, restaurants and shops, a duty-free retail mall for international travellers, conference centers and business support facility and also has 11 500 parking bays, for both short and long term paid use. The airport has 24 hour clinic offering a wide variety of services to travellers.

Conceptualizing Special Economic Zones (SEZs), Mr Mogara said that SEZs are designated areas within an economy that function with administrative, regulatory and fiscal regimes that are different from those of the domestic economy.

He said SEZs aimed to overcome barriers to both trade and Foreign Direct Investment (FDI) attraction by the SEZ implementing Country. They can contribute to economic restructuring and can be used as instruments of economic reforms to enhance competiveness.  ENDS