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Airfares take flight: Fuel price increases will make flying more ...


Airfares take flight: Fuel price increases will make flying more expensive

Airlines warn they can no longer absorb the fuel price hikes, which means you will fork out more to fly

Senior reporter

Air travel for South Africans is about to get more costly as the country grapples with record-high fuel prices.
Fuel increased by 26c per litre for 93 octane and 23c per litre for 95 octane at midnight on Tuesday. And while it may seem that only road travel will be hit, that’s certainly not the case.
Some airlines say they can no longer cushion the blow for passengers when it comes to rising fuel costs. As such, they have been forced to hike their fares.
Emirates is one such airline, and told Times Select that it could no longer no shelter its passengers from rising fuel bills.
“Like every commercially-oriented business, Emirates regularly reviews its fares to reflect market conditions including rising fuel prices and depreciating currency. Emirates has already incurred significant costs by absorbing a substantial portion of the recent fuel price rises.
“While every effort is taken to ensure our clients are sheltered from most impacts of negative cost scenarios, we also have to ensure long-term business profitability for ourselves and our trade partners through fair pricing and optimal cost containment.“In light of the repetitive fuel price increases, Emirates has added a surcharge effective June 29, 2018,” Emirates said in a statement.
Domestic operator Safair said it expected that the average fare “will go up”.
“Almost 40% of our direct operating costs for a flight are accrued to fuel, and unfortunately the double blow of a weakening rand and a rising fuel price has hit our industry quite hard,” said Kirby Gordon, head of sales and distribution.
“Low cost carriers like ourselves focus on a narrow-margin, high-volume approach to the aviation game and so, unfortunately, that does mean that our retail pricing is exposed to fuel price shifts as we don’t have margins to cushion these kinds of movements.”
There was still home hope of a cheaper flight – but it required planning and flexibility. And even then it is still likely to be more expensive.
“From a consumer perspective, people can still bag deals by booking ahead and being flexible with their travel dates.“That said, the overall average ticket price is likely to rise as a result of the fuel price assuming that all other things (like supply of seats, average demand patterns, etc) remain constant. No doubt is it a factor that puts significant upward pressure on the system as a whole,” Gordon added.
Comair’s two airline subsidiaries, kulula.com and British Airways, have meanwhile adopted a wait-and-see approach.
Comair spokesperson Susan van der Ryst said: “The airline industry is characterised by low-profit margins and significant price competition, which is exacerbated by volatile fuel prices and exchange rates. In an effort to manage Comair’s operating cost, we constantly have to innovate and improve our operating efficiency.
“Comair’s two airline subsidiaries … operate South Africa’s most modern and fuel-efficient fleet, which is less prey to fuel-price fluctuations than other airlines with older fleets.”
This, in turn, might help passengers using those airlines.
“Comair has no immediate plans to increase its air fares,” she said. “We are still monitoring the situation with the expectation that the fuel price will stabilise soon.
“However, the cost of fuel remains the airline’s biggest operating cost and continuous exorbitant fuel increases, together with the high rand versus dollar exchange rate, will naturally have an impact on air fares.”

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