Cape Town - Growing international passenger arrivals and a move away from
aeronautical-based revenue is how Acsa is expecting to keep itself within the
financial black, after reporting some R2bn profit in 2016.
Acsa’s acting CFO, Dirk Kunz. says the company is
very proud of its latest performance, which is expected to stand it in good
stead as it undertakes a number of short-term investments in infrastructure
enhancement and diversification.
The organisation is currently adjusting to a 35.5%
passenger tax cut - in play since March this year.
“Operationally, we are adapting well to a new
tariff regime from the regulator which required a 35.5% reduction for the 2018
financial year with increases in the following two years of 5.8% and 7.4%,”
Presently aeronautical revenue contributes an
estimated 63% to Acsa's total revenue.
“The overall financial position of the company
therefore remains healthy despite regulatory uncertainty and difficult economic
conditions,” says Acsa CEO Bongani Maseko.
SEE: Comair: Acsa's 35% passenger tax cut is not enough
economic drivers for the airport
Speaking to Traveller24 both Maseko and Kunz.
agree that the 2016 financial results success, “the best performance in the
company’s history”, is due to large international passenger growth to South
A total of 20.0 million (2016: 19.4 million)
passengers departed from the nine airports it owns and operates. While
domestic passenger growth was subdued at 2.2%, the Company reported strong
growth of 6.1% in international departing passengers.
Cape Town International Airport’s record 10 million
arriving and departing passengers for 2016, as well as King Shaka International
Airport’s total of more than five million passengers for the first time, have
all added to the kitty.
SEE: More direct flight routes on the cards as Cape Town Air
Access and SAT join forces
According to Acsa, aircraft landing volumes were
flat for domestic flights and up by 2.5% for international flights, indicating
higher passenger utilisation of scheduled flights.
Going forward, Acsa's strategy is to concentrate
more on routes development. Maseko says that the Cape Town Direct routes Access
initiative has been the most successful thus far.
It has been responsible for negotiating ten new
routes and 11 route expansions since its inception in 2015, adding over 650 000
seats and thereby helping Cape Town International Airport (CTIA) reach the 10
million passengers mark for the first time in 2016.
Maseko says it will also be working together with
the Dube Ports Trade and Gauteng Route Development committee - together with
South African Tourism, as part of its "deliberate strategy to steadily
grow passenger traffic" from each of its key airports.
Added to this he says Acsa plans to drive best
practice from these initiatives, to help benefit each city, "with key
elements of information sharing already happening".
of non-aeronautical revenue
While Acsa has met 76% of its performance
objectives in the period under review, which for the first time included additional
measures such as reducing environmental impact, improving connectivity to the
regions served, providing equitable access to safe airports, and leadership
“We now have 17 measures of performance that
underpin our three-pillar strategy to run airports, develop airports and to
grow our footprint. This ensures that the drivers of performance are moving us
in the desired direction and that all employees understand how they make a
difference,” says Maseko.
The three-pillar strategy captures objectives of
running airports efficiently and introducing innovations, improving capacity
and infrastructure, and producing more impactful outcomes for the country.
SEE: Acsa increases its global management presence
Kunz adds that Acsa has refined and enhanced its
transformation strategy to focus on seven sectors which account for the bulk of
its procurement. These sectors are information technology, construction,
property, retail, advertising, car rental and baggage handling.
According to Maseko, Acsa's Strategy 2025 to
outgrow its non-aeronautical profits , which he says needs to be at 55% instead
of the current 65%, will see less of a dependency on regulator tariffs.
Citing success such as Ghana and Brazil, Maseko
says Acsa is in discussion with three other African countries to manage and run
"While airports are still seen as sovereign
assets across most of Africa, Acsa sees development in air traffic across the
continent as an opportunity for growth," says Maseko in light of 40
African Union-member states committing to Open Skies for Africa, signing the
SEE: Lucrative Africa airline industry 88% outsourced to
Maseko says Acsa expects to finally put the tender
for the realignment of the Cape Town runway out to tender early in next year,
with discussions still at the design stage.
The re-aligned primary runway, Runway 18-36, will
be 3 500 m in length and will be built to international specifications,
allowing larger aircraft, like A380s and other Code F aircraft, to land here.
The upgrade will amount to R3.18 billion, with the project expected to be
completed by December 2021.
He also says plans to redo the Arrival Domestic
terminal at Cape Town International should be out for tender towards the end of
this year, with actual changes to the terminal expected to start happened in the
SEE: Cape Town's new runway a step closer after DEA green
- Added infrastructure changes on the cards to
enhance growth and improve capacity:
- - New Aprons for aircraft at OR Tambo
- - Refurbish both international Terminals at Cape
Town International and OR Tambo International.
- - Taxi Way work being in King Shaka
"If the current growth at King Shaka is
sustained, then Acsa expects to bring forward the expansion of its
international terminal. We’ve only got two wide-body stands and during
certain days of the week when there are three wide-bodies it becomes quite
mission to process passengers."
Maseko says Acsa only expects to action this within
a year or two at best.
What to read next on Traveller24:
- Acsa aviation barometer: New direct routes spike SA
- More direct flight routes on the cards as Cape Town Air
Access and SAT join forces
- Subdued growth across SA's major airports - Acsa