Publications
Partners
- ACSA does not agree with the claim by the International Air Transport Association's director-general that it simply wants to hike airport tariffs to make up for losses during the Covid-19 pandemic.
- IATA's director-general said earlier this week that some airports and air navigation service providers are seeking to shore up their finances by recovering lost revenue from their airline customers.
- ACSA, on the other hand, claims it recognised early in the pandemic that the aviation environment had changed radically and it responding accordingly through internal measures.
Airports Company South Africa (ACSA) says it was incorrect for the International Air Transport Association (IATA) to claim that ACSA simply wished to recover Covid-19 losses through steep increased airport tariffs.
ACSA claims it was rather a case of recognising early in the pandemic that the aviation operating environment had changed radically and responding accordingly through various internal measures.
Willie Walsh, director-general of IATA, said in his opening address earlier this week at the the global airline body's hybrid 77th Annual General Meeting in Boston that some airports and air navigation service providers are seeking to shore up their finances by recovering lost revenue from their airline customers.
According to Walsh, some of these entities want to increase charges "to recover the money that airlines could not spend with them during the Covid-19 crisis". He named several airport companies, including ACSA, as wanting to raise charges by 38% in 2022 to offset losses incurred as a result of the impact of Covid-19.
The allegation is "not only unfortunate but unfounded and lack a basic grasp of how tariffs are regulated in South Africa", ACSA said in a statement on Thursday. ACSA recently engaged with IATA's regional vice-president for Africa and the Middle East, Kamil Al-Awadi, during his visit to South Africa.
"At no point were these concerns raised during that engagement. The allegations made by Walsh are entirely unfounded and not supported by the facts. His aggressive response is unnecessary in an industry that depends more than ever on collaborative responses to the global crisis in aviation and post-pandemic recovery," ACSA says in its statement.
Al Alawadhi responded that IATA notes ACSA's position. However, IATA stands by its statement and reiterates its call for all governments - including South Africa's, its entities and tariff regulators - to step-up their support to the airline and tourism industries by providing, among other things, financial relief through the reduction of charges. Any increases in tariffs at this time will be harmful, not only to air travel, but to jobs and the recovery of economies.
ACSA says its aeronautical tariffs, including aircraft landing fees, aircraft parking fees and a passenger service charge are determined by an independent Economic Regulating Committee (RC). According to ACSA, the consideration for possible tariff increases in 2022/23 was initiated by the RC.
ACSA CEO Mpumi Mpofu says ACSA was invited by the RC to submit proposals on how the committee could assist regulated entities to be financially sustainable, but without placing an undue burden on users. ACSA then suggested an increase in tariffs of 35%.
Discussions are ongoing between the RC, airlines associations and ACSA. The RC is yet to make a final decision on the proposed tariff increase. Mpofu adds that it was the RC that took a decision to suspend ACSA's 2022-2026 Tariff Permission Application and thus run the current 2019-2023 permission to the end. The 2019-2023 permission allows for tariff increases of 3.3% in 2021/22 and 3.1% in 2022/23.
ACSA claims that, in the event that the RC agrees to its increase proposal, the company will still be one of four airports companies globally with the lowest airport charges. For example, the additional cost of a flight from O.R. Tambo International Airport to Cape Town International Airport would be in the region of R30.
"Given the forecasts for air traffic, such an increase will allow ACSA to break even in the year 2022/23 after accumulating losses in the previous three years. It is important to bear in mind that ACSA tariffs were reduced by 35.5% in the 2017/18 financial year, to the benefit of airlines and passengers," says Mpofu.
"In mitigating the negative financial impact of the pandemic on stakeholders including airlines, we moved quickly to introduce relief measures in the form of deferred payment arrangements and credit reprieves, to enable long-term sustainability of our industry. We have taken significant steps to support our financial sustainability. Capital expenditure projects that would have required investment of more than R14 billion were suspended in 2020. Operating expenditure has been cut significantly by R1.2 billion and headcount has been reduced by 20% to date."
