kulula warns of increase in airport charges

kulula.com warned (01-Jun-2011) Airports Company of South Africa (ACSA) plans to increase passenger charges and landing fees by 35%. It follows a 33% increase in 2010. This year's increase is expected to be followed by a further 31% raise in 2012, which will result in an accumulative increase of 161% by ACSA over five years. [more]

Comair/kulula.com: "The increase by ACSA comes at a time when average airfares have been declining while fuel prices have increased dramatically. The increase threatens the growth of air travel in South Africa and will have a negative knock on effect on the competitiveness of South Africa as a tourist destination and the broader economy. Budget sensitive travellers will be the hardest hit, as half of airfares will now go towards ACSA's airport charges. ACSA is now calling on users of its airports to fund its financial shortfall. In this freely competitive environment it is unlikely that local airlines will be able to absorb the 161% proposed increase in an industry where margins are consistently under pressure," Joint CEO, Erik Vente.