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Airports South Africa Builds Defense Against Pandemic Resurgence

Airports South Africa Builds Defense Against Pandemic Resurgence

Airports Company South Africa is looking to generate more income from hotels and land, win service contracts and boost cargo revenue to prepare for a potential fresh wave of Covid-19 infections and restrictions. 

The state-controlled owner of international hubs including Johannesburg and Cape Town fears a new coronavirus variant may emerge that is vaccine resistant, Chief Executive Officer Mpumi Mpofu said in an interview on Tuesday. Alternative revenue streams are therefore vital to ensure the ongoing financial health of the airports group, she said. 

“It’s the most unpredictable factor,” the CEO said by phone. A variant that undermines inoculations will send the whole industry “back to square one.”

South Africa’s aviation and tourism sector received a boost this month when the U.K. took the country off its list of banned countries and the U.S. opened borders to vaccinated travelers starting Nov. 8. That may lead to an influx of holidaymakers over the southern summer months and see a stronger season than thought possible in July, Acsa said in an earlier earnings statement.

Even so, preparations for a less favorable scenario are under way, Mpofu said. “We have an intention to monetize non-core assets, which does not necessarily mean disposals,” she said. “We have hotels, land and facilities at airports.”

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Acsa is also on the lookout for more contracts with other hubs to provide operational and technical expertise, positioning itself as a “go to” provider for African airports, the CEO said. A final plan is to expand into cargo aviation — one of the clear winners of the pandemic as e-commerce boomed. 

Acsa reported a loss of 2.6 billion rand ($178 million) in the year through March, compared with a profit of 1.2 billion rand a year earlier. The company got through months of almost no traffic by selling a 10% stake in Mumbai airport, issuing 2.3 billion rand of preference shares to the government and taking an 810 million-rand loan from the Development Bank of Southern Africa.  

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