Comair's hopes of owning airport dashed
Government will not sell Durban International to Acsa rival
October 14, 2009
By Slindile Khanyile and Samantha Enslin-Payne
Comair's hopes of owning the Durban International Airport were dashed yesterday by the government's announcement that it would not sell the airport to a competitor.
Comair said this week that it wanted to buy and operate the airport to compete with the new airport being built at La Mercy by Airports Company South Africa (Acsa).
Sbu Ndebele, the transport minister, who was speaking at an event at the new airport, said: "You can't have competition for La Mercy. It's such an expensive asset."
The new airport, which has cost R6.8 billion, will begin operating in May next year. The existing airport will continue to operate alongside La Mercy airport during the World Cup. It will be closed thereafter.
Monhla Hlahla, the chief executive at state-owned Acsa, said: "When we say closing Durban International we mean closing the aviation business." The land would be sold.
A task team has been set up to assess options for the site, which Ndebele said had been earmarked for industrial use.
The Department of Transport confirmed this week that it had received a letter from Comair, which was one of several offers that had come through for the south Durban site. Acsa reportedly wants R3bn for it.
Gidon Novick, the joint chief executive at Comair, this week stressed that the company did not want to fly from the new airport being built at La Mercy. It was too far from the city and would be more expensive for passengers.
"We believe there is a big market in Durban South and that passenger numbers will drop significantly if we move to the new airport because it will be more expensive for people. The current airport is 20km from the city centre and the new one is 45km," Novick said.
Novick was not immediately available yesterday to comment on Acsa's announcement that it would not sell to competitors.
Acsa has asked for a hike of 132 percent in the passenger service charge and aircraft parking and landing fees. This is to recoup the R16bn it would have spent on infrastructure by the end of March next year, of which the new airport is a part. The regulator decided two years ago that tariffs would only be increased once the assets became operational.
Hlahla said Acsa had warned the regulator then that the model was bad as Acsa's regulated asset base would grow from R9bn to R25bn next year. That needed to be recouped.
The tariff increase request of 132 percent was put forward based on the regulator's own formula. "I need to refund my balance sheet," Hlahla said.
Novick said if Comair had been allowed to buy the airport, it would appoint a local operator to run it. He would not name the firm, but speculation had linked Lanseria to the deal. Lanseria declined to comment.
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