Commercialization of air traffic & navigation in South Africa

Commercialization Policy

A policy document issued in July 1992 also called for the corporation and commercialization of the Government’s air traffic and navigation services. In August 1993, the Air Traffic and Navigation Services Company Limited (ATNS) was established as a SOE under the Air Traffic and Navigation Services Company Act (Act No. 45) of 1993. DOT transferred the responsibility for the maintenance and provision of air traffic and navigation services to ATNS, which is required to provide such services on a commercial user-pay basis.

The introduction of a user-pay system reflected the Government’s priorities of policy development, economic restructuring, addressing social inequalities and reducing the burden on the general taxpayer. To lessen the impact of the introduction of user charges to aircraft operations, the Government provided subsidies of ZAR 50 million and ZAR 35.4 million for ATNS in the first two financial years. Since the third financial year 1995/96, the company has operated entirely from revenues generated from its customer base.

Different from ACSA, a national transport policy in August 1996 did not advocate the privatization of ATNS. Rather, it stated that ATNS would remain a fully Government-owned public utility operating with a focus on providing quality services and be able to recover the costs of its operation and provide for expansion. Since 1997, the Company has established itself as a key role player in the Southern Africa Development Community (SADC) on air traffic services as well as future planning.

Economic oversight

Under the Air Traffic and Navigation Services Company Act of 1993, the Regulating Committee is responsible for the regulation of ATNS’s service charges, prescribing the company’s service standard and the arbitration of complaints lodged by customers. The regulation of ATNS is done by the same way as that of ACSA, that is, by way of a Permission which authorizes the company to levy air traffic and navigation service charges, provide air navigation infrastructure and conduct air traffic and navigation services with the conditions on such charges and service standards.

From the beginning to March 2005, the regulated charges were comprised of en-route (area) charges, approach charges (applying only to ACSA airports), and air traffic service annual charges. After extensive consultations about new tariff structures, in April 2005, the regulated charges were changed to area charges, aerodrome charges (applying only to ACSA airports), and terminal control area (TMA) access charges by splitting approach charges into aerodrome charge and a TMA access charge and eliminating air traffic service annual charges.

The Permission set out a price cap that limits the increase in a basket of revenue weighted tariffs of the regulated charges. The principle and formula of a price cap are the same as that applied to ACSA’s airport charges. In addition to a price cap, ATNS is required to maintain the level of service of any relevant activity at the level prescribed by the Permission.

Source: ICAO

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