South African airlines are adjusting fares and adding fuel surcharges as rising oil prices linked to conflict in the Middle East push up operating costs.
On March 11, FlySafair became the first domestic airline to announce the introduction of a temporary fuel surcharge. Other carriers have since confirmed fare adjustments in response to the rising cost of jet fuel.
SAA
SAA announced that it would implement fare increases across its domestic, regional and international network, effective March 12.
The adjustments apply to all cabin classes and may affect both base fares and the carrier-imposed YR (fuel surcharge) component.
Tickets already purchased and issued prior to the effective date will be honoured at the fare paid. However, all unticketed reservations that were not issued prior to the fare adjustment will be subject to the revised fares.
Airlink
Airlink started adjusting its fares as early as March 9 and will continue to do so, but it will not be imposing a levy on existing ticket holders.
“Airlink was notified by its suppliers on Tuesday morning that they had increased jet fuel prices at Cape Town and Gqeberha (Port Elizabeth) by as much as 70% week-on-week with immediate effect,” said de Villiers Engelbrecht, CEO of Airlink.
The airline currently has sufficient fuel stock for the rest of March and April; supply beyond that period remains uncertain.
Jet fuel price increases were expected as a result of oil price volatility, with Engelbrecht noting: “Although the situation in the Middle East remains fluid, it would be naïve to believe jet fuel prices would not rise sharply in the short to medium term and airfares will naturally increase.”
The airline is also considering capacity adjustments should it become necessary to mitigate variable costs.
LIFT
LIFT has adjusted fares for new bookings but will not impose additional costs on existing tickets unless changes are made.
Cilliers Jordaan, Chief Commercial Officer at LIFT said: “The rising cost of fuel has had a significant and immediate impact on the airline industry, directly affecting operating costs.” As a result, the airline has had to adjust its airfares.
CemAir
Miles van der Molen, CEO of CemAir, told Travel News that the airline was monitoring the fuel supply situation and the fluctuating fuel prices.
“We will continue to monitor the fuel supply situation closely over the coming days. We have noticed how rapidly the oil prices are changing so, depending on the trend in the next few days, we will make a decision about implementing a fuel surcharge,” said Van der Molen.
The airline plans to provide additional information about its decision next week.
African fuel costs surpass global averages
Even before the latest spike in oil prices, African airlines faced above-average fuel-related operational expenses, due to the high cost of jet fuel and the continent’s ageing, less fuel-efficient fleet.
Kamil Al Awadhi, Regional VP for Iata Africa & Middle East, noted that the cost of jet fuel in Africa was 17% higher than global averages and made up 40% of operational costs compared with the global average of 25%.
Historic disruptions halt local production
South Africa also relies heavily on imported jet fuel, following disruption to local refining capacity.
More than 90% of the country’s jet fuel is imported after production was halted following the July 2021 riots and the April 2022 floods.
“Those events saw the SAPREF facility in Durban halt production and coincided with the shutdown of the Astron refinery in Cape Town which was offline for several years while undergoing refurbishment. The latter only recently resumed production but at a very low scale,” said, Aaron Munetsi, CEO of the Airlines Association of Southern Africa.
As a result, local airlines accrue immense additional costs in the form of shipping, distribution and storage, as well as the obligatory levies imposed by SARS and other bodies.
