Johannesburg - Airports Company South Africa (Acsa) is looking at markets outside South Africa to generate more revenue from non-aeronautical activities such as retail operations and property development.
The company said on Friday that it was pursuing viable business opportunities in Africa in collaboration with the government. It would use its technical airport management expertise to assist other major airports on the continent.
Acsa has been involved in the refurbishment of airports in the Democratic Republic of Congo and Benin.
Acsa said it was also looking at India and Brazil to form a new focus on opportunities in emerging markets. The company owns 10 percent of Mumbai international airport and it might look at obtaining equity in other airports.
Acsa’s finance director, Maureen Manyama-Matome, said if such activities were successful, it would enable the company to reduce its reliance on aviation income.
Acsa’s results for the 2013 financial year were primarily driven by an increase in aeronautical revenue as tariffs to compensate for investment in expansion were now recoverable. In 2011 the airport regulating committee allowed Acsa to increase tariffs by 37 percent over three years.
In the financial year Acsa grew its revenue by 16 percent to R6.66 billion. Of this, only R2.4bn was non-aeronautical income that included retail operations, advertising, parking, car rental, property and overseas operations. This means 64 percent of revenue was generated by aviation activities.
Manyama-Matome said most airports around the world were moving to a hybrid model that created a balance in their sources of revenue. In Acsa’s efforts to achieve the same, she said the company was working on a new property development strategy.
“Acsa owns the land where airports are built. The aim is to utilise the land that is not required for aviation services. We are still in discussion about the plans and whether we should create a separate entity,” she said.
It had become crucial for Acsa to diversify its income streams and reduce its reliance on aeronautical income as industry projections for the next two years were that at best passenger traffic would see minimal growth and was more likely to decline by 3 percent a year.
In the year to March, 17.4 million passengers departed from Acsa’s network of nine airports. International passenger traffic and aircraft landings increased by 1 percent. Domestic traffic decreased by 3 percent.
Acsa was mulling further investment to expand airport infrastructure to cater for the inevitable long-term growth in passenger and flight numbers.
“Our maintenance capex is R17bn over a 10 year period. Capacity increase will be looked at if the economy is conducive,” she said.
Acsa reduced its debt to R14.8bn by March from R16.7bn in March last year. As a result, the company’s gearing ratio was reduced to 53 percent from 60 percent last year. - Business Report