Airports Company South Africa (ACSA) has received the ‘Draft Permission’ from its Regulating Committee on its tariffs application for the 2010/11 to 2014/15 period, submitted by ACSA in September 2009.
ACSA’s Regulating Committee has proposed a 59,9% tariff increase for the first year of the five-year period against the 132,9% originally applied for by ACSA. The Regulating Committee’s ‘Draft Permission’, or draft proposed tariffs increase, is summarised as follows:
PERMISSION PERIOD REGULATING COMMITTEE ACSA
Draft Proposed Tariffs Increase Permission Application
2010/2011 59.9% 132.9%
2011/2012 25% 24.4%
2012/2013 3.7% 0%
2013/2014 5.5% 0%
2014/2015 5.6% 0%
The ‘Draft Permission’ is materially different from ACSA’s tariffs application which was drafted in accordance with the Regulating Committee’s ‘Approach Document’. The ‘Approach Document’ was expected to enhance the predictability of the regulatory approach, which is of critical importance to investors of debt and equity in any economically regulated business.
The ‘Draft Permission’ is being shared with the industry to allow for their comment before promulgation of the new tariffs, as is required in the ‘Approach Document’. ACSA will be submitting its comments to the Regulating Committee’s ‘Draft Permission’ once all the analyses have been completed.
Subsequently, and as part of these analyses, ACSA has already requested clarification of the Regulating Committee’s ‘Draft Permission’ conclusions.
Said ACSA’s Group Executive for Communications and Brand Managemernt, Nicky Knapp: “We are hopeful that our Regulating Committee will share its approaches and models with us to ensure our full appreciation of the areas of difference.
Importantly, we are analysing the impact of the ‘Draft Permission’ on our business plans and will develop suitable mitigants, where feasible.”.
1. ‘Draft Permission’:
The Regulating Committee’s initial response to ACSA’s tariffs increase application, in which the Regulating Committee makes known its proposed tariffs increase.
2. ‘Approach Document’;
The document in which the Regulating Committee provides guidelines and rules for the processes and protocols to be followed in submitting the tariffs increase application.
3. ‘Tariffs’ include the following:
a. A Passenger Service Charge (PSC) charged to the passenger, per passenger on departures only (categorised into domestic, regional and international);
b. An aircraft landing fee charged to the airline, (categorised by maximum aircraft take-off weight and domestic, regional or international); and
c. An aircraft parking fee, charged to the airline, on aircraft parked for longer than 4 hours.
4. Understanding “AIRPORT TAXES”:
Every time a passenger buys a flight ticket s/he is charged something called ‘AIRPORT TAXES’, which varies from airline to airline. It is often wrongfully assumed that all ‘AIRPORT TAXES’ are charged by and accrue to ACSA when in fact only the ‘Passenger Service Charge’ portion accrues to ACSA. Here are the most common components of ‘AIRPORT TAXES’:
- ACSA’s ‘Passenger Service Charge’ which, as published in the Government Gazette on 30 January 2009, applicable for the period April 2009 to March 2010, is specifically either:
- R42.98 per domestic departure (excl. VAT); or
- R89.47 per departure to Botswana, Lesotho, Swaziland or Namibia (excl. VAT); or
- R118.42 per international departure (excl. VAT).
- A South African Civil Aviation Authority (SACAA) compliance charge of R11;
- An Air Passenger Tax of around R150, levied by the government on international inbound passengers only; and
- An Aviation Coordination Services (ACS) - an airlines collective group – charge of up to R21;
- An airline aviation insurance premium, applied by the individual airlines;
- An airline fuel surcharge, applied by the individual airlines (frequently the single largest component of the so-called “AIRPORT TAXES”).
5. The process going forward:
The ‘Draft Permission’ will be followed by a ‘Final Determination’, which will reflect the Regulating Committee’s decision on the new tariffs for the 2010/11 to 2014/15 period. These new tariffs will then be promulgated in the Government Gazette and, following a three-month notification period, will become effective.
Issued by : Airports Company South Africa
Contact : Nicky Knapp
Group Executive: Communications and Brand Management
Mobile : 082 3366 623
Landline : 011 723 1512