ACSA CFO Siphamandla Mthethwa says tariff increase lies with regulating committee

Siphamandla explains that ACSA’s 35 percent tariff increase is a response to a request by the regulating committee.

The Airports Company South Africa (ACSA) has announced that it plans to raise its charges by 35 percent in 2022 as part of a recovery plan to mitigate the impact of Covid-19 lockdowns and travel bans.

The 35 percent increase will allow ACSA to break even in the 2022/23 financial year after accumulating losses in the previous financial year.

However the airport company is facing some backlash from the International Air Transport Association (IATA), which believes that ACSA, among other African airport and air navigation service providers, is seeking to impose “outrageous” increases in the charges it levies on airlines.

“The problem is that some airports and air navigation service providers are seeking a solution to shore-up their finances by recovering ‘lost revenue’ from their airline customers. They want to increase charges to recover the money that airlines could not spend with them during the crisis,” said IATA director-general Willy Walsh.

ACSA CFO Siphamandla Mthethwa said that it wasn’t ACSA that made the final decision on tariffs and that it only submits an application supported by business plans to the regulating committee. The final decision lies with the committee based on ACSA’s application.

In addition, he mentioned that ACSA’s tariffs were previously reduced by 35.5 percent in the financial year 2017/18.

“This is not a tariff application but merely a response to a request by the regulating committee, which took a decision to suspend the 2022 to 2026 permission application and thus run the 2019 to 2023 permission to the end,” Siphamandla explained. “This decision came with a request from the committee for the regulated entities to submit proposals on how the committee could assist the regulated entities to be financially sustainable without placing a burden on the users.