Acsa tarriff cut- a drop in the ocean for airfares

AFTER two years of
negotiations, Acsa has
announced a 35,5%
cut in tariffs. Whether this
reduction will translate
into cheaper airfares for
travellers remains to be
seen, according to industry
experts.
From April 1, domestic
travellers will pay a
Passenger Service Charge of
R82, instead of the previous
R127, whereas international
passengers will pay R223
instead of the current R346.
Passengers departing from
Botswana, Lesotho, Namibia
or Swaziland will see a R94
reduction in charges and will
pay R169.
Tlali Tlali, spokesperson
for SAA, says the reductions
will result in a drop in the
total fare that passengers
pay, and is therefore good
news for the consumer.
Kirby Gordon, head of
Sales and Distribution of
FlySafair, says the reduction
in Passenger Service
Charges is a 35,5%
saving on a small portion
of an airfare.
“You’re looking at about a
R45 fixed saving per ticket.”
Acsa also announced there
would be 35,5% reductions
to airlines’ landing and
parking charges. Whether or
not these savings will mean
a further reduction in fares
will be at the discretion of
each airline, says ceo of
Aasa, Chris Zweigenthal.
He says airlines will look
at the reduction of these
charges in combination with
the volatility of other cost
elements, such as the cost
of fuel and the fluctuation of
the exchange rate.
Kirby says the Acsa
reductions to parking and
landing fees will reduce
the direct cost of operating
a flight, but says external
elements will impact on
these savings. “As a direct
cost, fuel is about 40%
of the price of a flight, so
that will have a stronger
influence on determining
fares. For the time being,
we will see some savings
but we don’t know how long
that will last because it is
dependent on the oil price.”
Spokesperson for Mango,
Hein Kaiser, is optimistic
about fuel prices for 2017.
“Some economists have
forecast a relatively stable
oil price at around the
US$50-60 range markers.”
Acsa has also said that
tariffs will rise by 5,8% in
the 2018/19 financial year
and 7,4% in the 2019/20
financial year.
The airline industry agrees
that, however small the
savings (as a result of the
tariff reductions) are, any
saving is a step in the right
direction. “Will it be a major
benefit for the consumer:
no, probably not. But the
reduction in tariffs is still a
good outcome for the airline
industry and the consumer,”
says June Crawford, ceo of
Barsa.