The Airports Company Act provides for an independent statutory body, the
Regulating Committee, to oversee the economic regulation of Airports Company
South Africa. 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 operation of Airports
Company South Africa airports
Encourage 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
Under the Act, the Regulating Committee regulates Airports Company South
Africa in two ways. Firstly, it limits aeronautical charges for each year of the
Permission period for any or all of Airports Company South Africa’s airports.
Aeronautical charges are determined for a period of five years, with a two-year
overlap. In effect, the application is made every three years. Charges at
the beginning of the period take into account the anticipated revenues of all
activities undertaken by Airports Company South Africa, whereby profits from
non-aeronautical activities are used to e aeronautical charges. This is
referred to as ‘single till’ regulation. Secondly, it prescribes service
standards at any or all of Airports Company South Africa’s airports.
Airport charges are regulated through the use of a price cap formula, CPI-X,
which limits the increase in a basket of revenue weighted tariffs to a rate of
inflation less an X-factor (efficiency factor). The X-factor is determined by
applying the building blocks methodology whereby each block of Airports Company
South Africa’s activities is identified, namely operating costs, depreciation,
return on capital and taxation. From this revenue requirement, the
non-aeronautical revenues are subtracted to determine the aeronautical revenue
requirement, which is divided by anticipated volumes to determine the level of
the anticipated unit price increases. 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 vary according to the origin of the aircraft and the aircraft
weight across three categories, namely: domestic, regional and international.
Similarly passenger service charges vary according to the destination of the
passenger. While for aircraft parking, the combination weight of the aircraft
and the duration parked (to the extent that time exceeds four hours) and the
parking stand utilised will be considered in determining the parking charges.
See the Government Gazette for future details.
Business excellence
Airports Company South Africa is focused on delivering core services more cost-effectively and more
efficiently through:
Delivering efficient capacity expansion in order to match forecast passenger
growth and meet the traffic requirements for the future,
Developing process excellence and continuous improvement,
Constantly re-engineering processes to manage costs and increase
revenues,
Ensuring the delivery of the regulatory commitments by spending capital sums
approved by the Regulator in the Permission Document and maintaining appropriate
infrastructure to deliver optimal customer service,
Focusing on Broad-Based Black Economic Empowerment and Socio-Economic Development, and
Improving efficiency in processing of passengers and goods by facilitating
seamless end-to-end service.
