MOODY’S changed
outlook for Airports
Company South Africa
(Acsa) to negative from stable
is likely to increase costs for
airlines, which may be passed
on to the consumer.
The global credit rating
agency’s reasoning was that
Acsa could not be rated
higher than government, which
owns74,6% of the airports
company.
Acsa’s fall from stable was
also attributed to regulation
oversight and its overflowing
debt in domestic financial
markets. A more attractive
credit rating is constrained
by the company’s ties with
the SAA group, “which relies
on financial support from the
South African government”,
the agency says on its
website.
This is bad news for Acsa
but also for the aviation
industry, the economy at large,
and – at the end of the day
– the consumer, says md of
Airlink, Rodger Foster.
“A Moody’s downgrade would
impact the cost of capital
to all lenders and, in turn,
borrowers in SA. This means
the cost of money will be
more expensive, which will
then be passed on to the
consumer. Acsa is the owner
and operator of the main
airport infrastructure in South
Africa and, as such, is a key
component of our national
air transportation system. It
leverages its balance sheet
and incurs debt to build
infrastructure. If it costs
more money to borrow money
this could directly affect the
consumer,” adds Rodger.
June Crawford, ceo
of the Board of Airline
Representatives of South
Africa, says the downgrade
may impact Acsa’s ability to
secure loans for infrastructure
projects, and that airlines may
be concerned because there
may be changes in landing
and parking fees paid to Acsa.
Chris Zweigenthal, ce of
the Airlines Association of
Southern Africa, believes
there won’t be much impact
on passengers and travel
agents. The damage is mainly
investment related, he says.
