Company Profile: Airports Company South Africa

The intrinsic link between airports and the fortunes of a company’s commerce and tourism cannot be underplayed.

With international air travel becoming a hugely competitive arena, South Africa has taken action, as it bids to strengthen its position in global markets.

In early 2017, Airports Company South Africa (ACSA) announced that it is set to reduce airport charges by 35.5 per cent from the April 1st.

The reduction applies to passenger service charges, aircraft landing and parking fees.

“Airport Company South Africa can guarantee that there will be a decrease in the passenger services charge as from the 1st of April. It will go from R127 to R82,” ACSA spokesperson Refentse Shinners announced.

However, Shinners said that airlines were at liberty to decide whether the reduced airport costs would translate into reduced ticket prices.

“Savings that will be derived from aircraft landing and parking charges will be entirely up to the airlines in terms of what they do with that saving,” Shinners said.

ACSA also announced that tariffs will rise by nearly six per cent in 2018 and over seven per cent in 2019.

ACSA was founded in 1993 and is responsible for the operation of ten of South Africa’s airports. The company is headquartered in the Maples Office Park in Bedfordview, South Africa.

Prior to the appointment of ACSA, all of South Africa’s airports were owned and operated by the state, but once the organisation was formed, nine airports were reassigned to ACSA, which at the time was owned by the government through the ministry of transportation.

In 1998, Aeroporti di Roma bought 20 per cent of ACSA’s shares and in 2005, Public Investment Corporation, a local South African company, bought the 20 per cent shares back from the Italian group.

The following year ACSA was part of a consortium that won the bid to manage the Chhatrapati Shivaji International Airport in Mumbai, India.

The organisation extended its international presence in 2012 with the signing of a 20-year concession agreement to manage the São Paulo–Guarulhos International Airport in Brazil.

In South Africa, ACSA is responsible for the operations at Johannesburg Airport (O.R. Tambo), Cape Town Airport, Durban’s King Shaka Airport, Bloemfontein Airport, Upington Airport and Port Elizabeth Airport – all of which are international airports.

Additionally, the following local airports are operated by ACSA: East London Airport, George Airport and Kimberley Airport.

Collectively these airports are responsible for more than 80 per cent of South Africa’s commercial air travel, managing over 35 million passengers per year.

However, in October 2016, news came through from the Eastern Cape Department of Transport that ACSA was about to add to its portfolio of local airports by taking over the management and operations at Mthatha Airport.

It was announced that in tandem with the local DoT, ACSA will be responsible for the management of the operations and maintenance of aeronautical and non-aeronautical assets of Mthatha Airport.

This addition comes at an exciting time for Mthatha Airport, which has ambitious plans.

Infrastructure at Mthatha Airport’s runway was recently extended to 2,600 metres in length and a contract has been awarded for the building of a passenger terminal, security fencing, roadways and car rental facilities.

Bongani Maseko, chief executive officer of Airports Company South Africa says, “Mthatha Airport is an ideal access point for some of the most attractive tourism destinations in South Africa, while there is also industrial potential around the town and access to people ready and able to work. We are therefore going to be encouraging airlines to look at the potential of this destination.

“We will also work closely with local authorities and business groups on activities to boost growth in the area,” Maseko added.

Furthermore, according to Maseko, the cost of flights to Mthatha Airport has already reduced significantly since the introduction of a new airline on the route, Fly Blue Crane.

“Commercialising Mthatha airport is an important element of our contract and we will apply our insight and experience from other airports in South Africa to making the area a hub of growth,” he commented.

While Maseko views the Mthatha Airport contract as a vote of confidence in the company’s ability to manage all aspects of airport operations, currently ACSA is working together with the Department of Home Affairs to alleviate bottlenecks due to biometric collection of data for all foreign nationals entering South Africa.

The biometric initiative is already in operation at ACSA’s Oliver Tambo; King Shaka, and Cape Town International airports.

Such innovation is typical of an organisation making its mark on the international stage. In May 2016, ACSA finished installing a solar power plant near the Kimberley Airport as part of a broader plan to install solar farms in all of its regional airports.

But it is not just in the domain of environmental consideration that ACSA is making its mark.

The impact ACSA has on South Africa’s economy is an equally important one; according to the organisation’s website:

“The nine airports owned by the Company are major generators of direct and indirect employment and business opportunities, providing the core of development nodes.

“The concept of the ‘aerotropolis’, whereby a range of manufacturing, logistics and commercial facilities, complemented by hotels, retail outlets, entertainment complexes and offices are clustered around an airport is likely to further accelerate the core role of airports.

“This is particularly true for King Shaka International Airport and its associated Dube Trade Port and the drive for an aerotropolis surrounding O.R. Tambo International, which is directed by Ekurhuleni Metropolitan Municipality.”

ACSA continues to thrive and in October 2015, the organisation received a real boost when the Portfolio Committee on Transport hailed it as a model of success that other state entities should seek to emulate.

“This is an entity that is running an efficient service with less reliance on government for funding. An R1.6 billion profit for the year under review, 3 airports among the top 30 in the world, and the ACSA Chief Executive Officer (CEO) as deputy President of the Airports Council International, the Committee could only congratulate this entity,” Chairperson Ms Dikeledi Magadzi said.

The aviation sector might be fiercely competitive, but ACSA is more than holding its own.