The Department of Transport has gazetted changes to airport tariffs for 2023, which will see price hikes for airlines making use of airport facilities in the country – some of which will be passed on to passengers.
The changes include fee hikes for parking, landing and passenger services – the last of which will have a direct impact on ticket prices.
The new fee schedule will see passenger service fees increase to R97.38, including VAT, for domestic travel, and up to R266.05 per passenger for travel to other destinations.
Parking and landing fees have also changed, determined on a sliding scale, depending on the weight of the plane.
Airport tariffs are a host of charges levied on airlines to make use of airport facilities.
While these fees are charged to airlines, some of the costs are recovered through passengers by adding charges to ticket prices – often included as ‘airport tax’.
Airports Company South Africa (ACSA) has stressed that not all ‘airport tax’ is a tax, however.
The group said that the term ‘airport taxes’ is often used for all charges, costs, and taxes recovered through the air ticket, thus creating an impression that ‘airport taxes’ accrue to ACSA.
The passenger service charges are but one of the charges collected through the air ticket, it said. These charges are required by National Treasury to be split between taxes, regulated charges, non-regulated charges and airline costs.
The actual taxes charged in ticker prices relate to value added tax (VAT) and international departure tax, ACSA said.
Regulated charges included as ‘airport tax’ include the passenger service charge, SA Civil Aviation Authority safety charge (SACAA), and the Air Traffic and Navigation Services charge (ATNS).
Non-regulated charges include the ACS passenger charge, while airline costs, also recouped through ticket prices, include fuel surcharges and insurance.
ACSA said that the service charges related to airports make up a “minuscule” portion of the overall ticket price.
Rising costs, rising ticket prices
The adjustment to airport tariffs follows the gazetting of new air traffic service charges in January.
According to Linden Birns, managing director of Plane Talking, various organisations – like ACSA, ATNS, SA Weather Services and the SACAA – all apply statutory user charges and levies on air travel, and then add VAT to the prices. Carbon Tax will soon be added to domestic flight charges as well, he said.
Some of the items are charged on a per-passenger basis and are visible on air tickets sold in the country, e.g. the ACSA Passenger Service charge and the SACAA’s Passenger Safety Charge, Birns said – however, he stressed that there is nothing an airline can do to absorb any increases to these charges.
“Other user charges are applied to each flight and may vary according to the maximum take-off weight and size of the aircraft operating that flight. Typically these are ACSA landing and parking fees, en-route navigation service charges, aeronautical meteorological observation and forecast charges,” he said.
“In all instances, airlines are obliged to collect those charges and pay them over to the SACAA on a regular basis. It’s quite an administrative cost burden for the airlines, for which they receive no compensation.”
Birns said that airlines, airport operators, air traffic management services and all of the other airport-based service providers all incur other statutory charges – eg. licences for pilots, cabin crew, technical personnel, air traffic controllers, etc.
“There are also licences and certificates/approvals that have to be paid for each aircraft, for training and maintenance equipment, facilities, etc,” he said.
The airline specialist said that airlines in South Africa are extremely conscious of customers’ sensitivity to any increases in the cost of air travel, and, as a result, they try to mitigate the impact of increases and absorb them – whether it is user charges, fuel, interest rates or items detrimentally affected by the USD/ZAR exchange rate.
However, he said that it is inevitable that they will have to recover some of these costs from customers.
“As with any business, the extent to which they will do this depends on the unique size, scale and structure of each airline.”