Acsa looks to retail and real estate for cruise control

28 Oct 2015

The state-run Airports Company SA (Acsa) is looking to learn from Germany's Munich Airport on how to reduce dependence on tariff revenue and instead boost income from nonaeronautical services. Acsa signed yesterday its first sister airport agreement with the Munich Airport Group, which is run by Flughafen Munchen and has similar partnerships in Beijing, Bangkok and Singapore.

Kounosu via Wikimedia Commons

The nonfinancial sister agreement will see the two airport authorities exchanging skills and expertise, with an opportunity for Acsa staff to travel to Munich for training and learning.

Reliant on tarrifs

Acsa's vision is to increase revenue from nonaeronautical services from 38% currently to 55% by 2020. Such a move would allow it to exercise more control over its bottom line, making it less reliant on increasing tariffs airlines have to pay for using any of its nine airports in SA. Acsa's tariffs for the next five years are yet to be finalised as it waits for the transport minister to sign off on a draft tariff schedule. A sharp drop in airport tariffs proposed by the airport regulator could trigger covenants the company has with lenders, making its R11bn debt book immediately payable.

Nonaeronautical activities, which include retail and real estate, make up 50% of Flughafen revenue. Acsa uses the tariffs to plan for capital expenditure programmes at the nine South African airports it manages. These projects include aligning the runway at Cape Town International Airport and a second mid-term field at OR Tambo International Airport.

Speaking at yesterday's signing ceremony, CEO Bongani Maseko said Acsa had engaged stakeholders about how it would handle any tariff changes.

Broadening the scope

Flughafen president and CEO Michael Kerkloh said the group wanted to extend these agreements to Africa. "We always thought we need to broaden the scope to Africa. Because, as far as aviation is concerned, Africa is not really on the world map yet, except for SA," said Kerkloh.

He had been impressed by the work achieved by Acsa and there were similarities between the two airport authorities. "One thing in which Acsa is much better than we are is engagement with other countries," he said. Acsa used Munich Airport Group services on a consulting basis when it moved from the old Durban Airport to King Shaka Airport and in the lead-up to the 2010 Soccer World Cup.

The twinning agreement has been divided into three phases, with phase one focusing on customer and quality management, airport consulting and nonaeronautical activities. Phase two would look at airport infrastructure and human resources development, and phase three at digitisation and the "green airport".

Maseko said Munich Airport was advanced in information technology, paid attention to the quality of service provided and insourced its retail. "For the last 20 years we have just been rent collectors. So we will find out how we can have a more high-quality retail facilitation," said Maseko.

Source: Business Day

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