Role of International Carriers in Growing the Tourism Market

1. Role of International Carriers in Growing the Tourism Market Barbara Dirnberger General Manager Malaysia Airlines Central and Southern Africa

2. Approximately 80% of all international arriving passengers into South Africa are carried by BARSA member airlines.

3. Airlines base their decisions to operate to a destination based on three key considerations: Return on investment Political interests Market Potential

4. Return on Investment • Local Considerations: • City: • Management and staff • Office rental • Communications • Marketing and Advertising • -Communications • Crew accommodation • Catering • Cargo management and handling • Airport: • -Landing and parking fees • -Ground handling expertise and cost • -Management and staff • -Equipment, maintenance requirements and availability • -Office rental, • -Communications • -Crew accommodation • -Catering • -Cargo management and handling • Political Stability • Aircraft availability commensurate with market demand • Bilaterals present and future • Slot times present and future • Competitive environment • Alliances • Local infrastructure • Crewing • Safety and Security • Domestic and Regional Network • Local Aircraft servicing, maintenance, parts • Insurances and Liabilities Costs

5. Return on Investment • Revenue: • Fluctuating currencies • Internationally traded currencies • Yields per passenger flown • Local strategic partnerships Revenue

6. Impact of Online International Service: South Africa – Buenos Aires

7. Brief • Initiated operations between Malaysia and South Africa October 1992 • Launched South Africa to Argentina service March 1994 • One cessation of service from FEB-MAY 2002 – due 9/11 • Opened one office with 7 staff compliment and is now 36 staff with offices in JNB, CPT and DUR • Initial operating aircraft a DC10, then MD11 and now 747 and 777’s. • Frequency remains two times a week with very high load factors.

8. Resulting conditions due to the freedom and ease of transport between the two countries: • Permanent populations in origin/destination countries • Increased economic trade, currently USD1billion between Argentina and South Africa. • Due to relaxed tourist visa requirements (none for 90 day visit), two major tourism developments: • VFR supporting restaurants, retail and local attractions • Independent and Package Tours supporting above as well as hotels and indigenous cultural industries

9. Resulting benefits: • Increased Regional development and activity: • The route carries a substantial uplift of passengers from regional Asian countries: China, Indonesia, Vietnam as well as regional Latin American countries: Chile, Brazil, Uruguay, as well as regional African countries: Namibia, Botswana, Zambia • Increased Domestic development and activity: • With the influx of tourist and business arrivals, there is increased demand on domestic flights and this in turn accelerates the demand for frequencies by local carriers, including LCCs.

10. Summary • International Air Service is a complex business of government interests and market driven economies • Resulting industries are enormous in scope and proven beneficial to receiving communities • Direct International Air Service should be encouraged and facilitated by all parties: Airports, Governments (Transport, Tourism), Airlines.

11. thank you