Airports Company South Africa (Acsa) yesterday refuted statements by the International Air Transport Association (Iata) that the local airport operator intended to increase airport charges by 38%, with Air Traffic Control (ATC) slated to implement a 63% hike in navigation charges.
This comes at a time that South Africans are confronted with higher air fares in the wake of Covid-19 which devastated the sector, and after players such as Comair in the local aviation sector, hit the wall.
In his address at the Iata annual general meeting and World Air Transport Summit on Monday, the director-general of Iata, Willie Walsh, said some airports and air navigating service providers were shifting costs onto airlines.
He said there were “grievous examples of some airports and air navigation service providers (ANSPs) shifting the cost of their inefficiency to airlines.”
Walsh drew attention to South Africa where the country’s main airports want to raise charges by 38%, and its air navigation service aimed to hike air traffic control fees by a staggering 63%.
He said there were “grievous examples” of some airports and ANSPs shifting the costs of their inefficiency onto airlines.
“In South Africa, airports want a 38% charges increase only to be outdone by ATCs’ demands for a 63% hike. With such bad behaviour on open display, calls for a lighter touch in economic regulation of our monopoly suppliers (and) must not be taken seriously by any government,” Walsh said.
In a stinging response, Acsa’s spokesperson Gopolang Peme said accusations by Iata about the company’s position on airport tariffs being high were unfounded.
“We have applied for a tariff increase in line with the regulatory framework which results in 17.5% in the first year, 17.5% in the second year and 0% for the rest of the financial years 2023/24 to 2027/28 permissions.
“The increases are driven by Acsa’s underlying costs and the independent traffic forecast that was approved by the Regulating Committee. It is important to note the increases are also coming off a low base caused by claw backs in the previous permissions where Acsa saw tariffs reduce by 35.5% in 2017/18,” Peme said.
Peme clarified that in the past, Acsa had issued detailed explanations on how tariffs are regulated in South Africa, and any decision to raise them goes through a rigorous process by the relevant authorities.
Acsa said in 2021 the director-general of Iata made similar accusations, stating that Acsa wanted to raise charges by a similar percentage to offset losses incurred as a result of Covid-19.
“This, as in 2021, cannot be further from the truth and Acsa would like to provide clarity on the matter,” it said.
“Any research conducted by Walsh will show that Acsa’s airport tariffs continue to be one of the lowest when compared to our international counterparts,” Acsa said.
Meanwhile, Iata said in its latest industry outlook for 2023 that the global scenario was better than expected with total industry net profits expected to reach $9.8 billion (R189.1bn) this year off total $803bn revenues for a 1.2% net profit margin.
Walsh noted that latest data show passenger traffic at more than 90% of the 2019-levels with margins being wafer thin as with $803bn of revenues, airlines would share $9.8bn in net profit this year.
It said, however, the outlook for Africa’s airlines remained negative as airlines on the continent were expected to incur a combined $0.5bn loss this year, which was an improvement on the $0.8bn combined loss of 2022.
“Africa remains a difficult market in which to operate an airline with economic, infrastructure and connectivity challenges impacting the industry performance. But despite these challenges, there is still robust demand for air travel in the region which underpins the continued move towards a return to overall industry profitability,” Iata said.
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