Sky-high airport increases raise airline community’s ire

The SA airline community has slammed both the application from the airport operator and the aviation regulator’s final approval of a whacking great increase in fees – which almost hits 60% in the first of the next five-years. Chris Zweigenthal, CE of the Airlines Association of Southern Africa (Aasa) told FTW that the members had “noted with great concern” the proposed increases to be granted to the Airports Company of SA (Acsa) and the Air Traffic and Navigation Services (ATNS) over the next five-year period. This begins with what he described as “substantial upfront increases” from April 1. The regulator is proposing a 59.9% increase for Acsa, with a further 25% increase from April 1, 2011, and single-digit increases for the next three years. For the ATNS, the regulator has passed a 42.6% increase effective from April 1 with single-digit increases for the next four-years. The only good thing that can be said about the regulator’s proposal, Zweigenthal added, is that at least it’s considerably less than what Acsa had applied for in August. Acsa was looking for a 132.9% increase in the first year and ATNS 33%. “Aasa does not support the level of the increases, nor the high up-front increases requested by Acsa and ATNS,” said Zweigenthal. “Such a spike in increases places an enormous financial burden on the passenger purchasing the ticket, and the airlines – which will be unable to recover these costs as they are incurred.” In its comment to the regulator on both permission applications, the association made proposals of significantly lower increases smoothed over the five years of the permission period. The Aasa suggestion also included a capital injection by the shareholder (the government) to assist the companies to restructure their respective balance sheets. However, the permission process is not yet complete, and Aasa is currently evaluating the full impact of the proposed tariff increases for both Acsa and ATNS and will provide a formal response to the regulator. The regulator is expected to issue a final permission by the end of March.