EXPERTS have warned that South Africans travelling domestically will have to live with increased flight prices until next year at least.
The airline industry is still reeling from the June liquidation of Comair and a rise in fuel costs which has spiked ticket prices by as much as 300%. The price is being further exacerbated by demand.
Aviation expert Guy Leitch said South Africans would in time get used to a post-Covid normal where the enormous oversupply of flights were no longer available.
“Basically we are going to have to live with these much higher fuel prices. Fuel constitutes around 35% to 40% of a well-run airline’s total cost.
“With the oil price hike from US$40 (R654) to $120 (R1 962) per barrel, it means that the increases will have the effect of passing on an enormous increase in ticket prices as well.”
Leitch said predictions were that they would also see fundamental changes in demand.
“A lot of business travel will now probably happen virtually or online, via zoom or teams platforms.
“This will take away a large part of the much-valued premium income business from full-service airlines, so we might not see a lot of the domestic flights return at all.”
Leitch said: “This will deter people who would travel to visit friends
and relatives.
“So now it’s just too expensive to visit granny for her birthday, all that demand falls away.
“There are a couple of factors that will play out. We will see a reduction in demand. Thereafter gradually we will see a steady increase in supply, not only from existing operators like FlySafAir, which will bring in five new aircraft in the next six months, but also a move into the domestic market from other regional carriers, who are now operating as a network
carriers on the golden triangle, known as the Cape Town, Durban and Joburg routes.
“Typically we will also see a reduction in prices after the Christmas rush, as supply meets demand as of the beginning of next year; until then we won’t see much change.”
In March, Comair was grounded after alleged safety concerns but spread its wings five days later.
On June 1, kulula.com and British Airways flights were suspended due to funding issues.
Economist Ulrich Joubert also weighed in on the spike in airfares. Joubert predicted another rise in airfares in the coming months.
“This is also attributed to the rise in fuel costs, and we know that fuel is very important to keep an aircraft in the sky.”
body.copy...: However, Joubert said these service providers should also be very careful when pushing up ticket prices.
“I’m saying this because it would take time before any other airline
says they will join in on the domestic line. We are hoping that it stabilises by the end of the year though, because with less competition in the market for domestic flights, airfares will rise.”
Cape Town Mayco member for Economic Opportunities and Asset Management James Vos said expensive prices would impact travel to the city.
“Therefore I’m advocating for open skies, which will enable more competition and more choices.
“It is through aviation that tourism and trade can literally and figuratively take flight.”