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Department of Transport’s to review ACSA’s economic regulatory framework
Thursday, July 07, 2011 | 00:00

Airports Company South Africa (ACSA) today, 7 July 2011, welcomed the Department of Transport’s announcement that it would review ACSA’s economic regulatory framework in order to facilitate predictable, transparent and balanced tariff determinations in the future.

“From our vantage point this is a huge step in the right direction. The future of ACSA and the aviation industry requires open, candid, yet robust engagement in order to safeguard its sustainability and balance the interest of stakeholders,” said Priscillah Mabelane, ACSA’s Executive Director: Finance.

Mabelane acknowledged that it had been a difficult and painful process for the industry, but added that the growing realisation that the industry was attempting to balance  competing business imperatives was encouraging. This is critical in view of the anticipated growth in the industry.

“It is clear, therefore, that the intended regulations should offer an unambiguous policy framework, provide the market with confidence and foster sustainable growth. There has to be balance and I am confident that it will be found,” Mabelane added. ACSA will participate fully and constructively in the process.

Whilst this review process is under way, ACSA has promulgated a set of tariff adjustments in order not to unduly burden airlines and passengers on eventual resolution and promulgation of the tariff review. This was based on the letter from the Regulating Committee, dated 20 May 2011. The letter provides for a 34,8 percent increase to the 2011/12 tariffs. ACSA recognises that the increase will have an impact on its customers but reiterates that they are unavoidable but necessary for the industry. The passenger service charge (exclusive of VAT) will be as follows effective from 1 October 2011:

New Tariff

Domestic

R96.49

Regional

R199.12

International

R262.28


The promulgation of the tariff adjustment is not necessarily an acceptance of the revised tariffs as proposed by the Regulating Committee in their letter of 20 May 2011. Our view is that, in considering the recommendations of the Department of Transport Task Team, the Regulating Committee did not factor in all the recommendations made by the Ministerial Task Team.

In that regard, ACSA welcomes the commitment made by the Department that, as part of the overall review process, a mechanism will be found by December this year to address the outstanding issues in time for the tariff adjustment in 2012.

In closing, Mabelane pointed out that the promulgated tariff increase will certainly enhance ACSA’s financial position. Further details will be made available during the release of the Company’s financial results in August 2011.

For enquiries, contact: Solomon Makgale on 082 781 8863

 

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