Parliamentary Question: dst: Airports Company of SA tariffs


Mr S B Farrow (DA) asked the Minister of Transport:
(1) What criteria are used to determine the airport tariffs levied by the Airports Company of SA;
(2) whether any economic and financial impact assessment have been undertaken on the impact of these tariffs; if not, why not; if so, what are the relevant details?


The Minister of Transport:
(1)The airport tariffs levied by the Airports Company South Africa Limited (ACSA) are determined by the Regulating Committee to ACSA and the Air Traffic and Navigation Services Company Limited (ATNS). The Regulating Committee is an independent statutory body established in terms of the Airports Company Act, 1993 (Act No 44 of 1993). The Act sets out the parameters of the Regulating Committee’s powers and duties with respect to the regulation of tariffs levied by ACSA. The most prominent regulating tool assigned to the Regulating Committee is the right and duty to issue a permission to ACSA to levy specified charges. The permission is valid for a period of five years and reviewed on a triennial basis.

In the process of determining the airport tariffs, the Regulating Committee is required to perform its duties and exercise its powers in such a manner as is best calculated to restrain ACSA from abusing its monopoly position, promote the reasonable interests and needs of all users of airport infrastructure, encourage timely improvements of facilities and infrastructure to satisfy anticipated demand, and to ensure that ACSA is in a position to finance its obligations and have a reasonable prospect of earning a commercial return.

The 2011-12 airport tariffs were thus determined as part of the 2010-11 to 2014-15 permission promulgated by the Regulating Committee in May 2010. In terms of that promulgation, airport tariffs can be increased by a maximum of 30.6% in 2011-12.
(2) The Regulating Committee, during its review of the ACSA tariff application in 2009, appointed independent consultants, Mott MacDonald, in association with Goba, to review the potential impact of the then 132.9% proposed tariff increase for 2010-11 on the industry. Mott MacDonald concluded that the potential impact would be a 5% once-off lower growth in domestic passenger volume and zero impact on international traffic volume growth.

The actual tariff increase for 2010-11 was 33.0%. Traffic volume grew by more than 6% for the same period, which was more than the industry forecast. In addition, a research and consultation process is undertaken before the tariff increases are granted by the Regulating Committee. Inflation, affordability and the economic impact are all considered in the Permission process. Reputable research institutions like the Bureau for Economic Research (BER) are used for economic outlook indicators.