South Africa may have Most Expensive Airports in the World

Date: 18 October 2011

Airports Company South Africa (ACSA) has received approval to increase tariffs at all of South Africa's major airports by as much as 161% over the next five years. If ACSA increases tariffs in line with this approval, South Africa could have the world's most expensive airports.  On 1 October 2011, ACSA already hiked tariffs for passenger service, aircraft landing and parking charges by nearly 70%.

 

South Africa’s aviation industry directly contributes R51 billion to the economy, and directly creates 270 000 jobs. The planned tariff hike is expected to hurt the aviation industry as it will result in airlines paying higher costs to use airports. It is also likely to result in job losses as well as higher travel costs for consumers, as airlines will inevitably have to pass the increased costs on to travellers in order to remain profitable.

 

Low cost airlines will be particularly hard-hit by the tariff increases, as their profit margins on ticket sales are generally low, and with the increased tariffs, it will be difficult to provide travellers with low airfares while remaining profitable. They are likely to increasingly favour using private airports such as Lanseria airport in Johannesburg, which is not regulated by ACSA, in order to avoid the tariff increases.