Minister approves tariff hikes for Acsa for growth post Covid-19

Air Namibia's Airbus A319 about to land on Cape Town International Airport’s main runway in this file photo. Picture: Henk Kruger Independent Newspapers

Air Namibia's Airbus A319 about to land on Cape Town International Airport’s main runway in this file photo. Picture: Henk Kruger Independent Newspapers

Published Mar 6, 2024


Transport Minister Sindisiwe Chikunga said yesterday that the five-year tariff permissions for Airports Company South Africa (Acsa) approved by the government were aimed at raising more than R20 billion for aviation infrastructure until 2028 as the industry encroached on 16% below pre-Covid 19 capacity.

To mild consternation, the minister also announced that the Domestic and International Air Licensing Councils would now be under the administration of the South African Civil Aviation Authority (SACAA) while another innovation was the introduction of a smart card to identify licensed pilots that was empowered with state-of-the-art security features.

This is along with the eServices portal launched last year where operators could submit their certificate renewal applications online and also pay online.

“These final tariffs Permission presented herein have been determined in the aftermath of Covid-19 when the aviation sector in the country is gearing itself to restore economic activity and also return to pre-pandemic performance levels,” Chikunga said.

The tariff permissions approved are: 4.5% in the current financial year, 10.3% in the 2024/2025 year, 6.51% in 2025/2026, 6.16% in 2026/2027 and 4.45% in the last year of 2027/2028.

South Africa’s tariff structure last year drew the ire of the International Air Transport Association (IATA) whose secretary-general Willie Walsh said there were “grievous examples of some airports and air navigation service providers (ANSPs) shifting the cost of their inefficiency to airlines”.

Walsh drew attention to South Africa, where the country’s main airports intended to raise charges by 38% and its air navigation service aimed to hike air traffic control fees by 63%.

Chikunga said the air service councils, which had no staff of their own, but members who met to adjudicate on applications, would get support including developing effective systems that would enable the smooth processing of air service licence applications and Foreign Operator Permits (FOPs) and includes the issuance and storage of related information.

“The Department of Transport will still be responsible for the budget allocation to the respective councils for each financial year, and such allocation shall be used towards the activities and functions of the councils," Chikunga said.

South Africa only saw the return of both councils in early 2022 after a 12-month hiatus that created massive backlogs that are still being worked on.

Chikunga said of the targeted R21.7bn, investments would focus on refurbishments, efficiency improvements and statutory compliance measures to improve asset availability, airport safety and passenger experiences at airports.

Over the next two years, Acsa plans to embark on crucial capacity expansion projects at Gqeberha’s Chief Dawid Stuurman International Airport and George Airport, focusing on expansion of their terminal facilities.

Acsa is also set to embark on the development of a new cargo terminal, known as Mid-field Cargo, at OR Tambo International Airport in Johannesburg.

Six new bussing gates will be added to the existing Terminal A facility at OR Tambo, along with augmenting retail, seating, and holding lounge areas. In phase 2, a new mezzanine level will be constructed.

At Cape Town International Airport, priority will be given to reconfiguration of the domestic arrivals terminal to meet growing capacity needs.

Acsa director Mpumi Mpofu clarified that the developments encompassed enlarging the meet and greet area, expansion of the baggage claim area, an additional baggage carousel, expansion of the domestic departures lounge, retail spaces and ablution facilities, as well as the addition of three new contact gates and fixed boarding bridges.

Plans were also advanced to realign the Cape Town International Airport runway to allow for a wider angle and bigger number of planes using it.

King Shaka International Airport in Durban will see the development of a hotel, with terminal expansion during the final year of the permission period.

In the air cargo sector, innovations such as real-time tracking systems, data analytics, automation and artificial intelligence to streamline operations had been introduced, she said.