SACAA Annual Report 2022_23

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The conflict between Russia and Ukraine began on 24 February 2022. Although the conflict does not directly impact South Africa, the fuel and Brent crude oil price skyrocketed in direct response to the conflict and worldwide sanctions on Russia and remains very volatile. Fuel is one of the largest cost drivers of airlines and adds one more challenge and uncertainty to an already over-burdened industry. Comair was placed on voluntary liquidation on 14 June 2022 after the airline had been in business rescue since 5 May 2020. Comair claimed that they held approximately 40% of the market share of local flights in South Africa on the routes that they operated. There was no increase in the PSC tariff during the year under review. After year-end, the Minister of Transport approved a 6.5% increase in the passenger safety charge, from R27.54 per departing passenger to R29.33, after receiving concurrence from the Minister of Finance. A total of R455.8 million was generated by passenger safety charges against a budget of R440.6 million. In the period under review, the PSC accounted for 51.5% of the total revenue, user fees for 15.5%, the fuel levy for 3.8%, the Department of Transport (DoT) for 25.4% and other income for 3.8%. Under

normal circumstances, the passenger safety charge contributes around 76% of the total revenue. As the passenger safety charge is the biggest contributor to revenue, the passenger numbers have a major impact on the financial performance of the SACAA, and these numbers are closely monitored every month. The SACAA’s revenue officials conduct regular PSC audits to ensure airline compliance and to ensure that the Regulator is able to fulfil its mandate. The regulations require that all airports submit monthly passenger numbers to the SACAA, which are then compared with the declarations received from the airlines. Substantial, unexplained variances in numbers supplied by the airports and those from airlines are examined during the audit process. The SACAA invoices the PSC one month in arrears to allow information received from airlines to be processed; thus, the actual passenger numbers reflected in the graph are also a month in arrears. A monthly provision is made for the arrears. Graph 1 analyses passenger numbers for the last five (5) years, comparing passenger numbers over the years with the impact of the COVID-19 pandemic being clearly visible from March 2020.

Scheduled Passenger Numbers (PSC)

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1.5

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Millions

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2018/19 2022/23 Graph 1: Passenger Numbers Over the Past Five Years 2019/20 2020/21 2021/22

Performance Information I Annual Report 2022/23 I 45