ADL eyes K35 billion from passenger fees
Airport Development Limited (ADL) has proposed a 40 percent increase in air passenger fees, a move that would make the company rake in over $20 million (about K35 billion) annually.
ADL chief executive officer Victor Lungu said this would enable the firm to embark on some ambitious projects, including construction of new terminals at Kamuzu International Airport (KIA) in Lilongwe and Chileka International Airport in Blantyre.
He disclosed this when ADL officials met the Parliamentary Committee on Transport on Friday where they shared progress on reforms, challenges they experience and opportunities for growth.
Lungu said the country’s main international airports have registered increased number of passengers since the sharp drop in 2021 when the Covid-19 pandemic hit the air transport industry.
“If we get that approved, we would do some of these projects because that could make us raise about $20 million a year, even more than that when passenger numbers increase,” he said.
Ministry of Finance and Economic Affairs spokesperson Williams Banda confirmed that they got the proposal which was endorsed at their level, but needs to be approved by the Cabinet.
“Treasury already assessed the proposal and accordingly recommended in line with the existing law to positively proceed with the decision,” he said.
Since the new law created Civil Aviation Authority and placed all airports and aerodromes under ADL, passenger fees have not been a revenue stream for ADL whose revenue comes from rentals, car parking fees and concessions with some service providers, said Lungu.
According to the new Aviation Act, the fees are distributed among several entities involved in the aviation industry, including the Civil Aviation Authority and Lilongwe Handling Company, among others.
Parliamentary Committee on Transport chairperson Enock Phale said they are impressed with progress of the reforms at ADL and the ambitious projects that also include a $250 million (about K438 billion) Mangochi Airport and a new Mzuzu Airport.
“We have ambitious projects which would transform the air transport industry in Malawi and as a committee we will do our part to help them achieve these goals,” he said.
Other major projects in the pipeline, according to ADL, include the development of an airport city at KIA whose developer was already identified and will jointly do the feasibility study, according to Lungu.
The development plan includes construction of a shopping mall, airport hotel, a university campus and residential housing units, among other facilities.
