Airport Tariffs

Background

Airports Company South Africa was established through the Airports Company Act of 1993. The Act provides for an independent statutory body, the Regulating Committee, to oversee the economic regulation of airport authority.

The principal objectives of the Regulating Committee are to:

Restrain Airports Company South Africa from abusing its monopoly position, without placing undue restrictions on its commercial activities
Promote the reasonable interests and needs of the users of Airports Company South Africa airports
Promote the safe, efficient, economical and profitable timely improvement of facilities at Airports Company South Africa airports so as to satisfy anticipated demand
Ensure Airports Company South Africa is able to finance its obligations and has a reasonable prospect of earning a commercial return

The tariff application process is known as the Permission Application and the promulgation of allowable increases, the Permission. The Permission Application is submitted by Airports Company South Africa, after extensive consultations with the airlines, whilst the Regulating Committee promulgates the Permission. The Permission Application is based on an Approach also determined by the Regulating Committee. This Approach provides for the rules and calculations for tariffs.

Annually, Airports Company South Africa is allowed to increase airport tariffs as provided for within the Permission. Airport tariffs relate to passenger service charges, aircraft landing fees and aircraft parking fees. Landing fees and parking fees, which are dependent on weight and origin of aircraft, are recovered directly from the airlines, whilst passenger service charges are recovered through the air ticket directly from the traveller.

Airports Company South Africa Passenger Service Charges

The current passenger service charges, inclusive of VAT, effective from 1 April 2019 are:

Domestic: R86.75
Regional: R180.57 (Botswana, Namibia, Swaziland, and Lesotho)
International: R238.07

What is ‘airport tax’?

The term ‘airport taxes’ is often used for all charges, costs, and taxes recovered through the air ticket, thus creating an impression that ‘airport taxes’ accrue to Airports Company South Africa. The passenger service charges are but one of the charges collected through the air ticket. These charges are required by National Treasury to be split between taxes, regulated charges, non-regulated charges and airline costs.

Description	Examples
Taxes	Value added tax International departure tax
Regulated charges	Airports Company South Africa passenger service charge SA Civil Aviation Authority safety charge Air Traffic and Navigation Services charge
Non-regulated charges	ACS passenger charge (ACS is a company owned jointly by the airline associations)
Airline costs	Fuel surcharge* Insurance

*Fuel surcharge is the biggest component of the ‘airport taxes’.

GDP growth as the driver for traffic volume growth

The airline industry often states that airport tariffs have a material negative impact on traffic volume growth. There is no empirical evidence for such statements. Studies have shown that airport tariffs have very limited impact, if any, on traffic volume growth. This is primarily because as a proportion of overall airline operating costs, airport tariffs are miniscule.

What are the different categories of Airports Company South Africa tariffs?

Airports Company South Africa charges users for the use of its facilities, in accordance with these regulatory provisions. The categories of airport charges are:

Landing fees
Aircraft parking fees
Passenger service charges

Landing fees vary according to the origin of the aircraft and the aircraft weight, and fall into three categories, namely: domestic, regional and international.

For aircraft parking fees, the combination of the weight of the aircraft and the duration parked (to the extent that it exceeds four hours) and the parking stand utilised are considered in determining the parking charges.

Passenger Service Charges (PSC) are charged on departures only, categorised into domestic, regional and international.

​​Background

Airports Company South Africa Passenger Service Charges

What is ‘airport tax’?

​GDP growth as the driver for traffic volume growth

Background

GDP growth as the driver for traffic volume growth