A combination of a substantial cut in airport fees, a weakening economy and lower traffic volumes has seen a massive drop in revenue and profit at Airports Company SA (Acsa).
The state-owned entity said on Thursday that its profit for the year to March 31 2018 fell 58% to R843m from R2.006bn a year earlier. Revenue was down 20% to R6.925bn from R8.636bn in the previous period.
Acsa owns and operates nine airports in SA.
Acsa attributed the declines mainly to a 35% reduction in the aeronautical fees it was allowed to levy for the 2017-2018 year under its operator’s permission granted by an independent statutory regulatory committee. Acsa collects landing fees, passenger service charges and aircraft parking fees. These fees are set to increase by 5.8% in the 2018-2019 year and by 7.4% in 2019-2020.
A delay in the permission being granted meant Acsa had to delay infrastructure spending, which pushed up repair and maintenance costs
CEO Bongani Maseko said Acsa had anticipated the reduction in fees and its efforts at mitigating the effect have been effective. “We did have some time to plan for lower tariffs, but these plans had to be firmly managed while coping with only moderate domestic passenger growth,” he said.
Aircraft landing volumes grew by 1% for domestic flights and by 3% for international flights, Acsa said. This represented 20.2-million departing passengers from 19.3-million in 2017. Domestic passenger growth was 4%, and 5% in international departing passengers. This was largely due to air access initiatives for Cape Town International Airport and King Shaka International Airport, which were greater than expected.
Acsa also managed to contain costs throughout the business, while improvements from operations outside SA and an appreciation in its investment property portfolio further helped offset the lower fees.
Acsa also reported a 5% increase in non-aeronautical revenue, though income from retail rental was slightly lower at R1.185bn from R1.186bn in 2017. “It is an area in which we would like to see an improvement,” said Maseko.
Acting CFO Dirk Kunz said losses at Acsa’s 50%-owned concession at Guarulhos International Airport in Brazil declined by R481m from R1.017bn in 2017. Acsa also has operations in India and Ghana.
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