Travellers and airlines can look forward to a drastic 35% cut in Acsa tariffs for 2017, according to Acsa’s latest financial report released last week.
Although final numbers for the tariff cuts will only be released once the Economic Regulator’s permission is released later this year, Chris Zweigenthal, AASA CEO, told Tourism Update a decrease is definitely expected.
“Any decrease will reflect a corresponding decrease in the Passenger Service Charge which will reduce the total cost paid for an airline ticket departing from an Acsa airport. I think the impact on travel to, from and within South Africa will be marginal but it is good news for the traveller,” says Zweigenthal.
The first draft permission, which was announced in May last year made provision for a reduction in airport charges of 42% for 2015/2016. After extensive industry negotiations, it was agreed that the permission decision be reviewed and announced at the end of June 2015. However, the final permission has not been published to date.
Due to delays in the permission process, Acsa tariffs have remained the same.
According to Zweigenthal, the delay in the finalisation of the permission is due to the review of permission applications submitted by Acsa and ATNS, by the previous Regulating Committee (whose term ended on March 1, 2016) and by the new Regulating Committee (who took office in April 2016), but that the final determination is expected by the end of 2016 if not sooner.
“The continued uncertainty in regulatory permission outcomes affects our ability to set accurate medium-term plans for the improvement of our airport operations,” says Chairman of Acsa, Skhumbuzo Macozoma.
With the exception of certain planning activities, the company has postponed all new capacity investments, including the re-alignment of the runway and terminal improvements at Cape Town International Airport and the addition of aprons at OR Tambo.
According to Zweigenthal, however, a reduction in tariffs won’t necessarily mean that all expansion plans will be halted as capital expenditure is taken into account when tariff amendments are made.
Meanwhile, Acsa has said that, although it reported a 20% increase in profits to R2bn, it is expecting a decline in profits in 2017 as a result of the dip in airport tariffs. CEO, Bongani Maseko, said he feared that a drastic reduction in tariffs could lead Acsa to breach loan covenants on R11bn debt.
