Acsa has reacted hotly to Iata’s naming it on a list of operators trying to recover lost revenues by applying to their regulators for inordinately large tariff increases.
Iata, in turn, stands by the contents of its original statement.
The airports company issued a statement on Thursday, October 7, saying: “These comments are not only unfortunate but are unfounded and lack a basic grasp of how tariffs are regulated in South Africa.”
“The company recently engaged Iata’s Regional Vice President for Africa and the Middle East, Kamil Al-Awadhi, during his visit to South Africa,” said an Acsa spokesperson. “At no point were these concerns raised during that engagement.”
In contention is an address by Iata DG, Willie Walsh, at the 77th Iata AGM, in which he said: “Some of our so-called partners want to increase charges to recover the money that airlines could not spend with them during the crisis.” He went on to name several airport companies wanting large increases in tariffs, including Acsa wanting to raise charges by 38% in 2022, to offset losses incurred as a result of COVID-19. See previous Travel News article https://www.travelnews.co.za/article/acsa-iatas-unacceptable-list.
“It is unacceptable behaviour to benefit from your customers during good times and stick it to them in bad times,” said Walsh.
The Acsa statement alleges that allegations made by Walsh are entirely unfounded and not supported by the facts. “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. Airports Company South Africa’s aeronautical tariffs, including aircraft landing fees, aircraft parking fees and a passenger service charge, are 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,” said the statement.
“The consideration for possible tariff increases in 2022/23 was initiated by the RC and is under discussion between the RC, airlines associations, and Airports Company South Africa as the regulated entity.”
Acsa CEO, Mpumi Mpofu, said in the statement: “Acsa was invited by the RC to submit proposals on how the committee could assist regulated entities to be financially sustainable, but without placing an undue burden on users.” Acsa said it had responded by suggesting an increase in tariffs of 35%, which would allow it to break even in 2022/23, after accumulating losses in the previous three years. It said it was important to bear in mind that its 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,” said Mpofu. “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 R1,2 billion and headcount has been reduced by 20% to date.”
Iata's response to Acsa
Shortly after Acsa’s statement, Iata’s Al Awadhi issued a responding statement, saying Iata stands by the original 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,” he said.