Concern over 70% hike in South African airport tariffs

Concern over 70% hike in South African airport tariffs Flying has never been a cheap mode of transport and as of 1 October 2011, it will become even dearer to those flying to and from South Africa. Airports Company South Africa (Acsa) has announced a 70% increase in airport tariffs; this applies to passenger service and landing and aircraft parking charges. As is the norm in cases like this, we can expect that the costs will be passed onto consumers. The Airlines Association of Southern Africa (AASA) is reportedly not happy with the increase for two reasons:

1) It will have a negative impact on air travel nationally and internationally.

2) The association has been kept in the dark throughout the entire process, which is against regulations. Actually, it’s not entirely against regulations, as AASA admits that regulatory processes are something of a shambles. And while all the different parties concerned agree that it is a shambles and that something needs to be done about it, nothing concrete has yet to be decided. Acsa is adamant that the increase is necessary to recover from a net operating loss of R220 million for the year ended March 2011. The loss comes despite total group revenue being up 32%, a 90% decrease in capital expenditure and a 6% increase in traffic.

According to the current managing director, Monhle Hlahla (who will be stepping down in September), they have increasingly satisfied customers as the satisfaction rating increased to 4.1 from 3.7 in 2010. One imagines that they won’t be that satisfied once the increased tariffs come into effect. A great chunk of the revenue and traffic came courtesy of the Soccer World Cup. South Africa experienced an almost unprecedented rise in tourism as people flocked to the country to see the greatest show on Earth. Unfortunately, momentum was lost and numbers have decreased since then.
International travel also faces a challenge from increasingly volatile global economic markets. People would rather stay at home and watch their pennies than fork out for a holiday overseas. Locally, people are just as likely to stay at home in case the trouble abroad hits home. Otherwise they’re likely to opt for budget airlines, which will struggle to retain that title in light of the 70% increase. It’s undoubtedly a tricky situation, but one in which Acsa feels justified.