Airports Company South Africa (Acsa) was concerned about the sustainability of the world’s airlines. The global commercial aviation sector was being hit very hard by the Covid-19 pandemic and the measures being taken to counter it, which had seen massive decreases in commercial air traffic worldwide.

“Airports are complex operations where fewer than 10% of the people working there are directly employed by Airports Company South Africa,” pointed out Acsa CEO Mpumi Mpofu. “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.”

(These mitigation efforts included cutting operational expenditure and severely limiting capital expenditure (capex). Previously, Acsa had planned capex of R17.9-billion over the next three years; now, the company’s capex would be limited to R1-billion a year.)

Regarding the South African aviation sector, Acsa viewed the situation as unclear, with three local airline companies currently under business rescue – South African Airways, South African Express and Comair. Acsa had suggested measures regarding the restarting of domestic air services, but the Department of Transport was the decision-making agency, and it would be making the regulations for the proposed Lockdown Level 3. 

“The situation in aviation is fluid,” she observed. “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 also recently had its debt rating downgraded by Moody’s Investors Service, and put on notice for a review, which could result in another downgrade. Key metrics being watched by Moody’s included Acsa’s liquidity profile, the strength of its credit, medium and longer term traffic volumes, and the possibility of government support.

“Airports Company South Africa 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,” she highlighted. “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.”