ACSA profits are up, way up, while passenger numbers have dropped and airlines continue to struggle against huge operational costs, fuel charges – and high airport tariffs. Figures show that, as a result of rapid increases in tariffs over the past four years, Acsa has more than doubled the revenue it built in its first 57 years, since the opening of OR Tambo International (then Jan Smuts).
Acsa posted a R991 million profit for the financial year ended March 31, 2013 – a significant increase when compared with the prior year’s profit of R188m. The results were driven primarily by an increase of 27% in aeronautical revenue (passenger service charge, and aircraft landing and parking charges) as a result of the tariff increases of 67%, implemented in October 2011, and a further increase of 6,5% implemented during the 2013 financial year. 
“The increase in profit is an indication that the group is starting to reap the benefits of the 2006 to 2010 capital investment programme,” Acsa said.
The airports company also managed to reduce its debt from R16,7 billion in 2012 to R14,8 billion in 2013. Acsa will pay 10% dividends of its profits for 2013 to its shareholders.

Meanwhile, according to Acsa’s report, there has been a 3%
decrease in overall passenger numbers. Domestic travel in particular declined
by 5%. Acsa attributes this negative impact on passenger and air traffic movement
to a sluggish GDP growth. International passenger traffic increased marginally
by 1%. 

“Acsa is in an enviable position – R991m profit, early redemption strategy resulting in a debt reduction, the ability to pay its shareholders a dividend. The airline industry, on the other hand, continues to operate in a difficult environment with high fuel charges, weaker demand and Iata showing an average of US$4 profit per ticket. These two situations are poles apart,” said Barsa CEO, June Crawford. 
“Acsa has an approved 10-year plan but we have not yet had sight of it. The international airline industry, through Barsa, will be taking careful note of the content of that plan insofar as the infrastructure development and maintenance is concerned and the associated expenditure requirements,” she said.
The Regulating Committee, which was appointed in March this year, will be assessing Acsa’s financials in great detail, as the Regulator granted tariff increases, allowing a return on capital investment based on the commissioning of new and upgraded airports in time for the 2010 World Cup and future capital and operational expenditure plans, said CE of Aasa, Chris Zweigenthal. “If Acsa saved, was it as a result of these programmes and increased productivity? Or was it because new projects that were part of the capital expenditure programme were delayed and only those focusing on refurbishments and maintenance were undertaken?” 
From this assessment, the Regulator will look at tariff increases going forward. “Tariffs are now at a very high level. There are grounds for why tariffs should be stabilised and Acsa should forego another increase,” said Zweigenthal. “If this were to happen, it would be a huge recognition of what is going on in the industry – passengers are burdened and the airline industry is not seeing the growth that it should.
“There is no reason to believe that Acsa’s financial results for 2014 will be worse than this year’s, even though traffic volume is down. In fact, the results are likely to be better,” he says.

Yasas Sri-Chandana, Comair’s Finance Director, agrees. Last year, following the release of Acsa’s 2012 financial results, Comair warned that the massive hikes in tariffs in 2010 and 2011 would have a detrimental impact on the sustainability of the industry and that this was seen in the collapse of Velvet Sky and 1time. “We are now working with airline associations and are in discussions with Acsa and the Regulator on the business model pertaining to tariff determination to try and ensure a more sustainable model going forward,” he says.