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The proposal by the aviation economic regulator to increase passenger service charges by 161% over the next 5 years will have a negative effect on passengers, the airline industry and tourism in general. At a time when airfares have been declining while air travel numbers have grown, it would be hard for airlines, already hit with rising fuel costs, to absorb this type of increase. The effect of this increase means that passengers will be expected to pay nearly double the current R42.61 for domestic travel and R104.30 on overseas travel. The Democratic Alliance (DA) believes that this proposed increase is not only inappropriate, but is the product of an unviable economic regulation system that does not prioritise the best interests of all stakeholders.
The DA has, for some time now, been concerned about the ad hoc arrangements currently in place to determine how tariffs are set for the Airports Company South Africa (ACSA) and the Air Traffic and Navigation Services (ATNS). Due to the nature of authorization in the ACSA Act and the ATNS Act, the tariffs are determined by the bottom line of these two agencies, rather than rational economic planning based on international best practices. The proposed increases that this temporary regulating body has put forth unfairly prejudice passengers who must now bear the brunt of the substantial FIFA 2010 World Cup capitalization programmes that took place at all our airports.
The DA has written to the Minister of Transport, S’bu Ndebele, regarding this and other pressing matters relating to the aviation sector, and in particular the establishment of a permanent economic regulator who can determine annual tariffs for ACSA and ATNS.
Unless a permanent economic regulator is established by Parliament, with clear operational guidelines, ACSA’s already tenuous financial position could be dealt a further blow. The DA calls on the minister to act swiftly in resolving this matter to ensure that South Africa remains a premier destination for air travellers.