/ 24 August 2009

Kulula.com raises alarm over Acsa financial crisis

Kulula.com and its parent company, Comair Limited, on Monday raised serious concerns about the financial crisis at the Airports Company South Africa (Acsa), the state-owned operator of South Africa’s major airports.

This follows the release of Acsa’s financial results last week in which the airport operator revealed a massive shortfall in funding to cover its R17-billion capital-expenditure commitments.

“We fully support the investment in necessary airport infrastructure, however, for the past few years the aviation industry has vehemently opposed Acsa’s excessive spend, to no avail. Now passengers are going to be called on to pay for it,” said Comair joint CEO Erik Venter.

The new R7,5-billion airport currently being built at La Mercy, near Durban, has been highlighted as a project undertaken without the support of the airlines and without a proven business case.

A study by the International Air Transport Association showed that the existing airport in Durban could handle demand for the next 10 to 15 years.

“Currently around 14% of the average domestic airfare goes to Acsa, comprising a charge for passengers of R49 as well as landing fees and rentals charged to the airlines. Acsa is proposing a doubling of these charges, even though, relative to the ticket price, they are already among the highest in the world. The proposal also comes at a time when travel volumes have already declined by 10% year-on-year and travellers are more price sensitive than ever before.

“Following the massive capital expenditure, Acsa is in desperate need of a capital injection from its shareholders. During these tough economic times, travellers do not deserve to be hit by yet another massive increase in airport charges,” concluded Venter.

Kulula.com also said that passengers had been hit by higher-than-average charges by Acsa.

It noted that currently Acsa was paid approximately R100 per single flight for each domestic passenger that travels through one of its airports.

This is made up of a R49 passenger service charge (PSC) and an additional R50 that is charged to the airlines for landing fees and rentals, it said.

The Acsa charge of 14% of average domestic ticket prices in South Africa is one of the highest ratios in world, and yet Acsa has mentioned that it would like to double these charges, said kulula.com. — I-Net Bridge