Plan for airport price controls
What you need to know:
Tanzania Civil Aviation Authority (TCAA) has said plans are afoot to propose to stakeholders an urgent review of regulations before the end of the current financial year aimed at introducing price caps at airports
Dar es Salaam. Aviation stakeholders are waiting with bated breath as they push for a review of regulations that may set a price cap at airports across the country.
This comes amid concerns over a ‘price war’ which has seen airport ground handlers accusing each other of trading at below the market price so as to win customers over from other airline companies operating in Tanzania.
The acting director general of the Tanzania Civil Aviation Authority (TCAA), Mr Daniel Malanga, said plans are afoot to propose to stakeholders an urgent review of the regulations before the end of the current financial year.
The extant regulations do not give room for TCAA to set a price cap, according to Mr Malanga, who doubles as the authority’s economic regulation director.
“During the stakeholders’ meeting on a review of the ground-handling regulations, the matter of price capping may be considered,” said Mr Malanga.
“We have prepared regulations for review; but, we are still studying the industry to establish the facts on the possible presence of unfair competition.”
He said that, after discussions by stakeholders, the draft regulations would be forwarded to the ministry of Works, Transport and Communication for further consideration.
The Tanzania Airports Authority (TAA) director general, Mr Julius Ndyamukama, welcomed the move, saying this would end the price war.
“Having multiple players on board without a price cap may end up causing a price war – thus eating into TAA earnings,” Mr Ndyamukama told The Citizen in an exclusive interview.
He said the authority’s earnings are based on a percentage of ground-handlers’ earnings.
The authority’s total revenue in the 2017/18 financial year rose by 5.3 per cent – to Sh103.03 billion –compared to the year before, according to TAA.
A board director of Celebi Tanzania Aviation Services Ltd, Mr Gaudence Temu, called for setting a floor price – the lowest official price that can be paid in markets – but not set a price ceiling: a maximum price that a service provider can charge. He said setting a floor price would avoid price dumping among operators.
