Acsa seeks R3bn Covid-19 relief from taxpayers over next three years
Airports Company SA (Acsa) says it needs an injection of R3bn over the next three years, citing the impact of the Covid-19 pandemic on the air travel business.
The company told the parliamentary portfolio committee on transport this week that it has been revising its corporate plan in line with scenarios that set out the potential impact of Covid-19 on traffic volumes and thus on its financial performance and position.
“The result of this scenario leads to a funding requirement over five to six years of up to R11bn. Of this amount, government support of up to R3bn may be required in the next three years,” Acsa said.
The company developed potential future scenarios to which it could respond dependent on the sustainability of airlines and the traffic volume demand post Covid-19. These include reductions in operational expenditure and limitations on capital expenditure.
It said its previously planned capital expenditure of R17.9bn over the next three years will now be capped at R1bn a year.
The transport committee said it was important to note that the financial position of the company was solid before the pandemic.
“The company had no intention of requiring government support. The company emphasised that the support would be in the form of guarantees and not bailouts,” the committee said.
Acsa also set out the implications of the recent downgrade of its debt by Moody’s Investor Service, which also put it on notice for a review.
Mpumi Mpofu, Acsa CEO, said outside the health-care sector, the aviation industry is being hit hardest by the reduction of commercial flying both in SA and around the world.
“Airports are complex operations where fewer than 10% of the people working there are directly employed by Acsa.
“We are therefore acutely aware of the Covid-19 impact on our entire ecosystem. Our efforts to mitigate the business impact of Covid-19 are essential if we are to help preserve the livelihoods of thousands of people in the sector,” said Mpofu.
Acsa has made proposals on the resumption of domestic services, but the decision lies with the department of transport when it issues regulations for level 3.
“The situation in aviation is fluid. New estimates of the impact of Covid-19 are emerging almost daily. However, it is essential to take steps now to mitigate the impact. We will be guided by unfolding events and revisit plans accordingly.
“Acsa has taken pride in its standing as a well-run state-owned company that has made a profit in all but one of its 26 years. While the circumstances in which we now find ourselves are extremely challenging, we will continue to apply the commitment and discipline that has served us well,” said Mpofu.