Despite the fact that the price of oil is at an all-time low, travel agents should expect further hikes in the YQ tax (fuel surcharge) as a result of the current Rand volatility.
Agents took to social media earlier this week to express concern over the YQ tax which they said increased significantly on Tuesday compared to the day before. Chris Zweigenthal, ceo of the Airlines Association of South Africa explained that the fuel surcharge is subject to variation in the exchange rate.
The fuel surcharge would then increase based on the deterioration of the exchange rate, Chris said. The South African Rand crashed to R17,99 to the US dollar at the weekend.
“It is normal for this type of thing to happen when the exchange rate takes a knock, so agents can expect this to continue because of the volatility of the Rand at the moment,” Chris said.
The fuel surcharge increased by a further R200 from Tuesday to Wednesday, an agent revealed. “I assumed it was because of the exchange rate because the fuel surcharge is based on US Dollars,” the agent said.
The agent predicted the hikes in the fuel surcharge would only get worse moving forward. “And airlines don’t adjust the surcharge again when the Rand strengthens,” she added. “For instance, from Monday to Tuesday the Rand strengthened but the surcharge increased.”
As a result of the volatility of the Rand, agents are in a difficult position when it comes to providing quotes to clients, the agent said. “You can’t hold the flights anymore because the price won’t be the same tomorrow,” the agent added.
Chris added that the Air Passenger Duty tax could also cause uncertain airfares. He explained: “The APD out of Heathrow, for example, is determined in the UK and is a Pound figure. If they are collecting in Rands in a certain amount, and it’s R25 to the Pound compared to when it was R19 just a couple of months ago, the airlines would then need to find the money to pay that back.”
