Durban – Airports Company South Africa (ACSA) is addressing recent accusations by the International Air Transport Association (IATA) about the company’s position on airport tariffs.
They said that the comments were "not only unfortunate but are unfounded and lack a basic grasp of how tariffs are regulated in South Africa."
Willy Walsh, director-general of IATA said this week that some providers abused their positions to mitigate the loss caused by Covid-19.
In his opening address earlier this week at the hybrid 77th Annual General Meeting of IATA in Boston, Walsh said that some airports and air navigation service providers sought to shore up their finances by recovering lost revenue from their airline customers.
Walsh named several airport companies, including ACSA, as wanting to “raise charges by 38% in 2022,” to offset losses incurred as a result of Covid-19.
ACSA maintains that the allegations were "not supported by the facts."
ACSA said in a statement: "His aggressive response is unnecessary in an industry that depends more than ever on collaborative responses to the global crisis in aviation and post-pandemic recovery."
According to ACSA, their aeronautical tariffs, including aircraft landing fees, aircraft parking fees and a passenger service charges, were determined by an independent Economic Regulating Committee (RC).
"It is the RC that took a decision to suspend Airports Company South Africa’s 2022-2026 Tariff Permission Application and thus run the current 2019-2023 Permission to the end. The 2019-2023 Permission allows for tariff increases of 3.3% in 2021/22 and 3.1% in 2022/23," it revealed.
They said the "consideration for possible tariff increases in 2022/23 was initiated by the RC".
CEO Mpumi Mpofu said ACSA was invited by the RC to submit proposals on how the committee could assist regulated entities to be financially sustainable without placing an undue burden on users.
Mpofu said the company responded by suggesting an increase in tariffs of 35%.
ACSA believes the increase will allow Airports Company South Africa to break even in the year 2022/23 after accumulating losses in the previous three years.
"It is important to bear in mind that Airports Company South Africa tariffs were reduced by 35.5% in the 2017/18 financial year, to the benefit of airlines and passengers.
“In mitigating the negative financial impact of the pandemic on stakeholders, including airlines, we moved quickly to introduce relief measures in the form of deferred payment arrangements and credit reprieves, to enable long-term sustainability of our industry. We have taken significant steps to support our financial sustainability. Capital expenditure projects that would have required investment of more than R14-billion were suspended in 2020. Operating expenditure has been cut significantly by R1.2bn and head count has been reduced by 20% to date," added Mpofu.
The RC is yet to make a final decision on the proposed tariff increase, ACSA said.
"In the event that the committee agrees to Airports Company South Africa’s proposal, the company will still be one of four airports companies globally with the lowest airport charges," ACSA added.
Speaking to IOL Travel, IATA's Regional Vice President for Africa and Middle East, Kamil Al Alawadhi, said IATA stood by its statement.
“IATA notes ACSA’s position. However, IATA stands by its statement and reiterates its call for all governments - including South Africa’s, its entities and tariff regulators - to step-up their support to the airline and tourism industries by providing, among other things, financial relief through the reduction of charges. Any increases in tariffs at this time will be harmful, not only to air travel, but to jobs and the recovery of economies,” said Alawadhi.