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Cape Town - The UK’s Civil Aviation Authority has put its foot down and said no to London Heathrow Airport’s requested inflation plus 4.6% increases in charges, limiting increases to inflation over the next five years in its final proposal (airlines, by contrast, had wanted Heathrow to reduce airport taxes by 9.8% p a over the next five years).
Airport charges at Heathrow may be a continent away, but they matter to the many South Africans who fly to the airport.
“This proposal is the toughest Heathrow has ever faced. The CAA’s proposed cost of capital of 5.6% is below the level at which Heathrow’s shareholders have said they are willing to invest,” said Heathrow CEO Colin Matthews.
On the other hand, Dame Deirdre Hutton, the chair of the UK CAA, said: "Tackling the upward drift in Heathrow’s prices is essential to safeguard its globally competitive position. The challenge for Heathrow is to maintain high levels of customer service while reducing costs."
The UK has a similar setup to South Africa, where the increase in airport taxes is a regulated affair. The difference is that the UK’s major airports are privately owned, whereas in South Africa most airports are owned by the Airports Company South Africa, a government entity.
The (close to) monopoly situation enjoyed by Acsa in South Africa makes the work of the Regulating Committee in SA vital to ensure that Acsa does not abuse its position.
South African airline passengers have suffered massive hikes in airport taxes, which Acsa have used to fund the construction of King Shaka International Airport and upgrade other airports.
Our airports in South Africa are magnificent, but would South Africans prefer something more basic (like a warehouse) in exchange for lower airfares?
In a survey conducted by SouthAfrica.TO, 54% of respondents said that if it would achieve lower airfares, they would opt for a far more basic airport.
- Fin24
* Rob Baker is co-owner of South Africa Travel Online. Follow him on twitter on @southafricaTO.
Airport charges at Heathrow may be a continent away, but they matter to the many South Africans who fly to the airport.
“This proposal is the toughest Heathrow has ever faced. The CAA’s proposed cost of capital of 5.6% is below the level at which Heathrow’s shareholders have said they are willing to invest,” said Heathrow CEO Colin Matthews.
On the other hand, Dame Deirdre Hutton, the chair of the UK CAA, said: "Tackling the upward drift in Heathrow’s prices is essential to safeguard its globally competitive position. The challenge for Heathrow is to maintain high levels of customer service while reducing costs."
The UK has a similar setup to South Africa, where the increase in airport taxes is a regulated affair. The difference is that the UK’s major airports are privately owned, whereas in South Africa most airports are owned by the Airports Company South Africa, a government entity.
The (close to) monopoly situation enjoyed by Acsa in South Africa makes the work of the Regulating Committee in SA vital to ensure that Acsa does not abuse its position.
South African airline passengers have suffered massive hikes in airport taxes, which Acsa have used to fund the construction of King Shaka International Airport and upgrade other airports.
Our airports in South Africa are magnificent, but would South Africans prefer something more basic (like a warehouse) in exchange for lower airfares?
In a survey conducted by SouthAfrica.TO, 54% of respondents said that if it would achieve lower airfares, they would opt for a far more basic airport.
- Fin24
* Rob Baker is co-owner of South Africa Travel Online. Follow him on twitter on @southafricaTO.
