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ACSA ready to accommodate fast growing passenger traffic
Tuesday, September 04, 2007 | 00:00  

With passenger traffic estimated to be in excess of 45 million passengers a year by 2012 from the current 32,8 million, Airports Company South Africa (ACSA) will be spending R19,3 billion on infrastructure developments at its network of ten airport over the next five years.

Passenger demand, on the back of strong economic performance, is largely driven by the entry of low cost carriers into a market where a growing proportion of the population can now afford air travel. The entry of new foreign carriers including Delta, Thai Airways and Virgin Nigeria buoyed international passenger arrivals.

"It is pleasing that the Regulator has authorised new tariffs that will make it possible for ACSA to undertake its development programme for the airports," says Khulile Boqwana, ACSA’s Group Specialist: Economic Regulation.

"ACSA has been experiencing, and will continue to experience, strong demand growth due to the rapidly growing GDP in South Africa and the surrounding geographical region, as well as the upcoming 2010 Soccer World Cup. "To fully appreciate the impact current and expected passenger growth has had on the business, we will have to spend about R4,9 billion over the 12 month period to 31 March 2008. This is an enormous leap considering that we spent about the same amount over the previous five years period and now have to do it in one year," he added.

The R4,9 billion is part of the R19,3 billion infrastructure development programme the Company will embark upon over the five year period to 2012.

Bongani Maseko, the Group Executive: Operations, says delivering efficient and customer focussed service is what underpins the company's focus over the period leading up to 2010 and beyond. However, for this to happen there is a related cost that needs to recovered.

‘‘Unfortunately, the flying public is often misled when it comes to facts around what constitutes airport taxes,’’ he says. ‘’These charges are often lumped together with other taxes and are called airport taxes, giving the impression that the entire airport tax is paid to ACSA. The truth is only the Passenger Service Charge component accrues to ACSA.’’

The Permission Document, based on earning a reasonable return on the existing ACSA asset base, capital expenditure plan and operating costs provides an average increase of airport charges of 11,4% during the regulatory period.

It should be noted that the charges are independently regulated in a manner that ensures passenger protection. Over the past five years to 2006, average passenger service charges were increased by an average 4%. The increase for the current financial year is in fact 9,8% while the overall average annual increase over the five year period is 11,4%.

At present, the new passenger service charge tariffs approved for the year 2007/8 financial year are as follows (all figures mentioned are exclusive of 14% VAT): R32,46 for domestic, R66,67 for regional (Botswana, Lesotho, Namibia and Swaziland) and R87,72 for international flights. As a result of the fact that ACSA will only start charging the new tariffs in November this year instead of at the beginning of the financial year (1 April 2007) as we normally do, the Regulator has agreed that the tariff increase for the year may be spread over the remaining 5 months giving rise to tariffs that will be charged between November 2007 and March 2008.

Furthermore, we work on "the user pays principle". In other words, passengers only pay for the infrastructure that they are using. So, the average 11,4% increase in tariffs is a reflection of the new facilities that will be coming on stream over the five year period. We are, therefore, of the view that our tariffs are reasonable and compare with other international airports.

John Neville says the planned infrastructure improvements included a new international pier and the expanding and refurbishing of runways at O.R. Tambo International. Cape Town International Airport will be expanding dramatically increasing its current capacity of 6,5 million passengers to 12 million passengers, including additional parking and roadways.

Issued by Airports Company South Africa (ACSA)

For more information please contact Solomon Makgale, Communications Manager on 082 781 8863

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