Guiding consumers since 2009

Airfares could increase in April

By Danielle van Wyk

Amid various increases coming into effect this year, April also sees the implementation of domestic and international airfare increases by between 5 -10% . Justmoney looks at what the various local airlines have to say.

“April is traditionally the month when airfares are adjusted in line with the International Air Transport Association tradition.

“As a result, South Africans can expect domestic and international airfares to increase by between 5% and 10% on April 1,” confirmed Flight Centre.

The price of an airfare ticket is generally comprised of ‘basic fare, fuel surcharge, departing country, transiting country, destination country airport and government-imposed taxes.’

Flight Centre explained that, while airport and government taxes are standard, the fuel surcharge is airline specific. This, in addition to the weak state of the rand, despite low oil prices, have caused the increase.

“Unfortunately, as the fuel is priced in US dollars, the current exchange rate is working against us. As the fuel price comes down the deteriorating rand counters any possible saving,” stated Carlos Luis, Flight Centre’s air warehouse leader.

FlySafair’s sales and distribution vice president, Kirby Gordon, similarly added: “Any rise in airfares will be very much driven by a raise in the operating costs for airlines. We are heavily exposed to two major macroeconomic factors: the rand/dollar exchange rate and the price of oil. These factors affect our fuel bills, our aircraft financing and the cost of parts for maintenance. Collectively these things account for about two thirds of the cost of operating any flight.”

Airline reaction

“We are always monitoring the applicable fares on any of the routes that we operate to. This is normal for any airline. The process of establishing fares is a very intricate one which involves various aspects of our business.

“These include but are not limited to supply of seats on a specific route and at a specific schedule or time; demand for seats to a specific destination at specific times and on specific days; operating conditions along the network of stakeholders; prevailing economic conditions; projected demand; anticipated elasticity of demand; and at times we are faced with environmental factors that are beyond our control,” stated South African Airways spokesperson, Tlali Tlali.

However, Tlali failed to confirm any concrete increase for the airline as yet, stating only that “In the event we decide to increase air fares, we make sure that all our customers who are already booked on the specific flights and or routes that are impacted by the fare increase are advised of the increase as far in advance as possible so that they are able to make alternative arrangements if they so wish.”

Another local airline, FlySafair, correspondingly stated that they were not looking to increase their fare base as yet.

“We are not looking to increase our fares at this stage, but airline prices are generally set by the market to a large degree and we do anticipate that there will be a general raise in the expected fares.

“Working off of insight from economists who are projecting using the rand dollar exchange rate and the price of oil as inputs, we expect to see a raise of between 5% and 10% which is very much in line with the anticipated 6% consumer inflation rate projection,” commented Gordon.

Advice for consumers

Despite the increase in fares, consumers are said to be benefitting from airline competition.

“Unfortunately airfares are set to rise slightly given the economic factors that we are facing, but the airline industry is facing very healthy competition at the moment, which is great for consumers.

“In February 2015, Online Travel Portal Travelstart published stats that illustrated that fares had dropped by as much as 39% on some routes we operated, so while any rise is painful consumers are still in a much better position than they were three years ago,” noted Gordon.

He further advised consumers to follow FlySafair’s three resident golden rules. These include:

-Booking early: Get the best possible deal by booking well in advance.

-Travel light: Save on the cost of additional checked in luggage. With FlySafair, for example, this would see you saving around R250.

-Be flexible: “Look at your travel times and rather opt to travel for midday and midweek flights, as they are often cheaper than weekend flights,” encouraged Gordon.

Flight Centre’s Luis, further advises consumers who know their travel dates and destination, to book and pay for their tickets in March to avoid the hike.

*British Airways, Kulula.com and Mango all failed to comment at the time of publication.

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