Acsa to slash tar­iffs by April

Re­duc­tion said to be long over­due in terms of the reg­u­lat­ing for­mula in the Acsa Act

The Star Early Edition - - BUSINESS REPORT - Ka­belo Khu­malo

SOUTH Africa’s air­port man­age­ment com­pany, Air­port Com­pany South Africa (Acsa) said yes­ter­day that it would slash tar­iffs by 35.5 per­cent in April in a move that might see air­lin­ers also re­view­ing their ticket prices.

Acsa op­er­ates the coun­try’s nine air­ports, in­clud­ing OR Tambo In­ter­na­tional Air­port, Cape Town In­ter­na­tional Air­port and King Shaka In­ter­na­tional Air­port. Air­lin­ers would still de­ter­mine ticket prices, but the mooted re­duc­tion would trans­late into a de­crease in air­lin­ers costs such as land­ing, park­ing and pas­sen­ger ser­vice charges.

Acsa’s an­nounce­ment fol­lows the com­pany’s up­date on Wed­nes­day that it would be as­sess­ing the im­pli­ca­tions of the fi­nal per­mis­sion and come with a proper response in or­der to main­tain a pru­dent fi­nan­cial state. “The com­pany will en­gage with in­vestors and rat­ing agen­cies once the de­tails of the response to the fi­nal de­ter­mi­na­tion are ap­proved by the com­pany’s board of di­rec­tors,” the com­pany had said.

Acsa said the tar­iffs would be re­duced by 35.5 per­cent this fi­nan­cial year. How­ever, the charges would in­crease by 5.8 per­cent in the 2018 fi­nan­cial year and by 7.4 per­cent in the 2019 fi­nan­cial pe­riod.

Acsa chief ex­ec­u­tive, Bon­gani Maseko, said yes­ter­day that the In­de­pen­dent Reg­u­lat­ing Com­mit­tee had ap­proved the tar­iffs. “We are happy that this process has fi­nally con­cluded, and all the role play­ers can now have reg­u­la­tory cer­tainty,” he said.

The new per­mis­sion to levy air­port charges was pro­mul­gated and pub­lished in the Gov­ern­ment Gazette last month.

Maseko said Acsa had al­ready in­cor­po­rated the ex­pected re­duc­tion in its fi­nan­cial plan­ning. “It is im­por­tant to note that the fi­nan­cial per­mis­sion

Re­duc­tion in Acsa tar­iffs en­vis­aged in the course of this fi­nan­cial year

is in line with Acsa’s ex­pec­ta­tions and what was pro­posed to the Reg­u­la­tory Com­mit­tee. We an­tic­i­pated this out­come for some time, and fac­tored in into our fi­nan­cial and busi­ness plan­ning,” said Maseko.

Pas­sen­ger ser­vice charge per de­part­ing do­mes­tic pas­sen­ger will be R82, down from R127. Pas­sen­ger ser­vice charge per de­part­ing in­ter­na­tional pas­sen­ger will be re­duced from R346 to R223, while pas­sen­ger charge per de­part­ing pas­sen­ger for air­ports within Le­sotho, Botswana, Swazi­land and Namibia would go down to R223 from R346. Acsa said air­craft land­ing fees and air­craft park­ing fees would also be im­pacted, but these would vary ac­cord­ing to the max­i­mum take-off weight on air­craft and length of stay.

Co­mair chief ex­ec­u­tive Erik Ven­ter said yes­ter­day that the tar­iff re­duc­tion would bring relief to air­lines and the fly­ing pub­lic, “but does not go far enough.” He said the re­duc­tion was long over­due in terms of the reg­u­lat­ing for­mula in the Acsa Act that de­ter­mines Acsa’s rev­enue.

“It does not, how­ever, ad­dress the su­per prof­its Acsa has made over the past two years, when it un­der­spent its capex bud­get, but con­tin­ued to col­lect tar­iffs at ex­or­bi­tant rates set for the World Cup. These World Cup in­creases saw tar­iffs rise by around 160 per­cent.

“There is pro­vi­sion in the Acsa Act for the reg­u­la­tor to claw back ex­cess prof­its re­sult­ing from over-collection of tar­iffs or un­der-spend­ing on bud­get. We hope that this le­gal pro­vi­sion is ap­plied and the claw back is used to off­set fu­ture in­creases in the pas­sen­ger tax and land­ing fees,” said Ven­ter.

The claw back should also ad­dress the sale of Dur­ban In­ter­na­tional Air­port to Transnet for ap­prox­i­mately R2 bil­lion. “This went di­rectly to Acsa’s bottom line, de­spite the fact that air­lines and their cus­tomers paid for the air­port, as well as its re­place­ment, King Shaka. It should also con­sider in­ter­est earned on the su­per-prof­its as well as pro­ceeds from the sale of Dur­ban Air­port,” he said.

June Craw­ford, chief ex­ec­u­tive of the Board of Air­line Rep­re­sen­ta­tives South Africa, said yes­ter­day that the de­crease in tar­iffs would prove to be good for the con­sumers and the tourism in­dus­try, but said the de­lays had im­pacted on in­fra­struc­ture roll-out in the sec­tor.

“The lengthy dis­cus­sions with the eco­nomic reg­u­la­tor have led to a two-year de­lay, so we are now well into the 20152020 per­mis­sion pe­riod. This has in turn re­sulted in de­lays for Acsa in re­spect of in­fra­struc­ture de­vel­op­ments and im­prove­ments,” said Craw­ford.

Air­ports Com­pany South Africa yes­ter­day an­nounced that air­port charges would de­crease by 35.5% for the 2017/18 fi­nan­cial year. These charges will then rise by 5.8% in the 2018/19 fi­nan­cial year and 7.4% in the 2019/20 fi­nan­cial year.

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