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The state of SOEs: ACSA
The state of SOEs: ACSA
Increasing aviation through investment in South African airports
Upgraded airports, increased retail spaces, and improved digitisation are just some of the ways the Airports Company South Africa (ACSA) is looking to improve travellers’ experiences at airports across the country.
ACSA has unveiled plans to expand infrastructure and capacity in the medium and long term in a bid to recover from the pandemic. Among these plans are reopening shops and restaurants, a digital parking system, and upgraded pay stations. But there are also large-scale infrastructure upgrades planned for OR Tambo International Airport, King Shaka International Airport in Durban, and Cape Town International Airport.
REGROUPING AFTER LOSSES SUSTAINED IN THE PANDEMIC
The upgrades come as ACSA works to recover the losses experienced during the pandemic. In the financial year ending in March, ACSA recorded an R1-billion loss. However, this showed recovery against the previous year’s loss of R2.6-billion thanks to improved travel on the back of decreased travel restrictions as a result of the pandemic.
ACSA recorded that revenue was up by 81% in the 2021/22 financial year, from R2.2-billion to R3.9-billion, in a “difficult operating environment” created by the pandemic and civil unrest.
Chief Executive Officer, Mpumi Mpofu, said that the recovery was supported by a gradual and intermittent recovery in passenger numbers in comparison to the previous year.
“Domestic travel accounted for 83% of passenger traffic during the reporting period. We are still experiencing 30% less volumes than in pre-COVID-19 travel, but the domestic market has been instrumental in driving our performance during the period under review,” said Ms Mpofu. Retail revenue increased by 95.8% to R607-million (2021: R310-million) due to increased traffic volumes. Among the improvements underway for OR Tambo are a revised governance framework and a new organisational structure.
Other upgrades include the replacement of most credit card payment devices and a mobile application for easier payments, the development of a seamless parking system, including license plate recognition, and the replacement of all lighting, including in baggage reclaim areas, security checkpoints, and parking garages. The airport will also see the refurbishment of escalators and travelators.
A FOCUS ON TECHNOLOGICAL ADVANCEMENTS
Similar improvements are being implemented at King Shaka and at Cape Town International. These include a biometrics-driven automated border control system, electronic check-in bays and an upgraded parking management system, which includes a tap-and-go credit card payment option.
In addition, tenders have been issued for repairing the taxiways and motorised gates at Cape Town and OR Tambo and repairing boarding bridges at the three airports.
Improvements to security systems come with a price tag of R460m for this financial year, while R172m will be spent on improving parking systems. Repair and maintenance costs will increase to R339m.
In addition, OR Tambo will become the first airport to use the South African Revenue Service’s (SARS) new digital travel pass, which will come into effect in November. The system will collect necessary travel information and grant a traveller pass via email, simplifying passenger movement at South African airports. All travellers will be required to complete the declaration, and once completed, air passengers will receive a pass before they board. The online system will ultimately be rolled out at all South African international airports, with the programme expected to be fully operational at the end of the first quarter of next year.
A strategic national asset The Department of Transport has been lobbying for the expansion of South Africa’s airports and has committed to giving them increased attention in the next few years. This will include expanding existing international airports into larger ‘aerotropolises’, while rationalising the need for smaller, less profitable airports. The government owns a 74.6% stake in ACSA, and the Public Investment Corporation holds 20%. The rest is held by a number of private investor groups.
Transport Minister Fikile Mbalula has described the state-owned enterprise as a “strategic national asset with an important role to play in South Africa’s economic reconstruction and recovery”. He also added that the company has a role to play in the growth of the aviation sector on the continent. “While it is true that ACSA has been severely impacted by the Covid-19 pandemic as a result of travel restrictions, it remains on course on the recovery path,” said Mbalula.
Mpofu has said that the outlook for travel through South African airports is positive, especially with a growing trend towards intra-Africa travel. She added that central, west and north Africa had fully picked up in terms of travel to Europe, and this remains a good indicator of recovery on the rest of the continent.
“African aviation is also performing much better, with a number of countries rebuilding with extensive economic growth by building airports and ensuring route development and traffic development from their countries to Europe and the US, but also within the continent, so the outlook for Africa is good. Recovery is projected for 2024, and we as ACSA are looking to participate in the opportunities that present themselves.”
