Rising domestic airfares, driven by temporary fuel surcharges, are starting to affect demand, with agents reporting growing price sensitivity as cost pressures ripple across the market.
According to a Travel News poll of nearly 140 respondents, 48% of agents said clients are cutting back on domestic travel because of fuel surcharges. This is particularly affecting leisure travel, with travellers opting for self-drive trips instead.
“I do more self-drive bookings now than what I used to. People who would usually opt to fly are considering trips closer to home where they can self-drive. For a family of four, flights between Cape Town and Joburg are now (if you are lucky) a minimum of R16 000,” said an agent who wished to remain anonymous.
She said clients are mainly choosing Western Cape and KwaZulu Natal self-drive trips. “For example, none of my Joburg clients booked flights for the new Club Med. They will rather drive down and back,” said the agent.
Business travel continues
On the other hand, business travellers need to travel and are generally absorbing the higher fares.
“Because my clients are corporate, they need to travel and will pay the fees. As an agent though, I am embarrassed to quote clients on the current fares,” said Andrea Penrose, ITC Travel Specialist at XL Sandown Travel.
However, business travellers are adopting a more flexible approach.
“They are now more inclined to be a bit more flexible on their dates and flights, as sometimes staying over one night works out cheaper,” said the anonymous agent.
Reaction from clients
The increases have come as a shock to travellers. “Clients are horrified at the fares, particularly when they still have to pay for pre-seating, baggage or priority boarding,” said Penrose.
Candice Cloete from Carmel Travel, said she has received numerous complaints and has lost bookings. “I’ve lost one group for August because they just couldn’t afford the extra charges, which were well over R10 000, which is a lot for a school group,” said Cloete.
Fares to remain high
Despite hopes that fares may ease in future, agents believe prices are likely to remain elevated. “I am hoping they will ease, but I am afraid this has become the new normal and people will just accept it,” said Cloete.
The anonymous agent believes that even if temporary surcharges fall away, overall prices are unlikely to drop. “The increases are due to the temporary fuel surcharges, which will hopefully fall away. However, airlines will need to make up for the shortfall. When these surcharges start to fall away, some will adjust their actual fares and keep the current rates. In the long run, this will then keep rates more or less what they are now,” she said.
According to Penrose, even if clients get used to it and continue to pay the fares, the situation will drive them to direct bookings.
“Our jobs are difficult enough as it is with airlines approaching clients directly and offering preferential fares if they book online. These exorbitant rises in costs are just pushing clients to book online if they can get it cheaper because everyone is trying to save a penny,” said Penrose.
