Acsa 'solid' despite traffic slump

Johannesburg - Airports Company South Africa (Acsa) on Thursday reported a 13% rise in revenue to R3.2bn for the year ended March 2009, boosted by a strong 20% rise in non-aeronautical revenue - property, core retail, car hire, hotel operations, car hire and other income - to R1.7bn.

Deputy Transport Minister Jeremy Cronin described the results as a "solid set of financial results" despite the turbulent and contracting economy, globally and in South Africa.

Cash generated increased 35% to R1.6bn.

Passenger numbers, for the first time in Acsa's history, showed that the overall reduction of 7.7% was primarily on the back of a 10.4% drop in domestic traffic, which contributes 70% of total passenger traffic. International traffic, which yields higher returns, declined by 0.74%. Similarly, aircraft landings decreased by 3.8%.

"What made our situation more difficult was the fact that we were undertaking the highest-ever capital expenditure programme for the business. In addition we had to contend with adverse determinations by the regulator, which required the group to pay upfront for the capital expenditure programme and recover the investment later through tariffs simultaneously. This was at a time when banks and other finance institutions were tightening their lending criteria," said Priscillah Mabelane, Acsa's executive director: Finance.

Aeronautical revenue - passenger service charge, aircraft landings and parking - grew marginally by 6% to just over R1.4bn.

Monhla Hlahla, ACSA's managing director, said Acsa's response to the challenge was to focus on non-aeronautical income, diversify sources of funding, review the capital infrastructure programme of R17bn and improve customer care initiatives.

"Simply put, the future infrastructure development and sustainability of Acsa are at risk. It is crucial for us that the current regulatory model recognises Acsa's position. The model requires policy input so that it can be more transparent, predictable and balance risk and reward," she added.

Hlahla concluded that she was however optimistic, now that there is an opportunity to review with the industry and the regulating committee's future airport infrastructure requirements and requisite tariff regime.

- I-Net Bridge