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Johannesburg - Airports Company South Africa (Acsa) is hiking its tariffs by 70% in October.
In April 2010 the regulator approved a 33% tariff increase, and last month another of 34.8% for 2011.
Because this increase was approved only recently by the department of transport, Acsa will be able to implement the bigger hike in October.
Acsa spokesperson Solomon Makgale said this meant the group needed to recoup 12 months’ tariff increases within six months.
He said Acsa was convinced that this would not have a significant impact on travellers. Although it would have some effect, he considered the increases ultimately fair and affordable.
Chris Zweigenthal, chief executive of the Airlines Association of Southern Africa (AASA), said that the increases will be a huge blow for airlines, but they have already been approved and now seem unavoidable.
Nevertheless, the association is fighting to have them phased in over the longer term.
The hikes are worrying airlines. Over the past year high oil prices have put airlines’ profit margins under tremendous pressure and a further burden will be unwelcome.
Inati Ntshanga, chief executive of South African Express (SAX), said the increases are exorbitant and will have a direct impact on airline profits. Last year SAX had paid almost R50m over to Acsa.
If one assumes that everything remains the same, he explained, the money to be paid over will be closer to R85m, which is considerably more and will have a direct impact on passengers.
Ntshanga said the problem is that passengers can adjust to prices up to a certain level, but they are not as amenable to being told prices are going up 10%. That will be bad for business.
Last year state-controlled low-cost airline Mango paid almost R180m to Acsa and air control services. Spokesperson Hein Kaiser said this amount included landing fees and all other airport expenses.
He said that as far as cost increases are concerned, the amount that Mango pays to Acsa depends on the number of flights undertaken and the number of passengers transported.
But the amount per passenger per flight will probably correspond roughly to the tariff increase.
Kaiser said regular increases in airport costs made it increasingly challenging for airlines to keep tickets affordable.
- Sake24.com
For business news in Afrikaans, go to www.sake24.com.
In April 2010 the regulator approved a 33% tariff increase, and last month another of 34.8% for 2011.
Because this increase was approved only recently by the department of transport, Acsa will be able to implement the bigger hike in October.
Acsa spokesperson Solomon Makgale said this meant the group needed to recoup 12 months’ tariff increases within six months.
He said Acsa was convinced that this would not have a significant impact on travellers. Although it would have some effect, he considered the increases ultimately fair and affordable.
Chris Zweigenthal, chief executive of the Airlines Association of Southern Africa (AASA), said that the increases will be a huge blow for airlines, but they have already been approved and now seem unavoidable.
Nevertheless, the association is fighting to have them phased in over the longer term.
The hikes are worrying airlines. Over the past year high oil prices have put airlines’ profit margins under tremendous pressure and a further burden will be unwelcome.
Inati Ntshanga, chief executive of South African Express (SAX), said the increases are exorbitant and will have a direct impact on airline profits. Last year SAX had paid almost R50m over to Acsa.
If one assumes that everything remains the same, he explained, the money to be paid over will be closer to R85m, which is considerably more and will have a direct impact on passengers.
Ntshanga said the problem is that passengers can adjust to prices up to a certain level, but they are not as amenable to being told prices are going up 10%. That will be bad for business.
Last year state-controlled low-cost airline Mango paid almost R180m to Acsa and air control services. Spokesperson Hein Kaiser said this amount included landing fees and all other airport expenses.
He said that as far as cost increases are concerned, the amount that Mango pays to Acsa depends on the number of flights undertaken and the number of passengers transported.
But the amount per passenger per flight will probably correspond roughly to the tariff increase.
Kaiser said regular increases in airport costs made it increasingly challenging for airlines to keep tickets affordable.
- Sake24.com
For business news in Afrikaans, go to www.sake24.com.
