A 34% fall in the oil price since
November has brought no relief
to travellers. In fact, South
African travel agents tell TNW that
although oil is at an all-time low, fuel
surcharges have increased during
this period.
Agents have been outspoken
on the subject on TNW’s sister
publication, eTNW. One agent
said the oil price was predicted to
become cheaper than water. “Even
with a terrible rand, fuel surcharges
shouldn’t be so high.”
Although agents acknowledge that
airlines are faced with a crippling
rate of exchange, most are left
wondering why the airlines decide
to “hide” this cost in a surcharge
instead of increasing the base fare.
Franz Von Wielligh, gm of Flight
Specials, says that all commercial
agreements that agents have
with regard to commissions and
incentives are based on the fare
portion of sales, thus not increasing
the base fare disadvantages
agencies in terms of reaching
targets.
“The airlines are the ones
bleating about transparency – going
mad when agents find a way to
charge a service fee ‘hidden’ in
the ticket price – but then they [the
airlines] hide their own increases in
the fuel levy. That is such doublestandard,
underhand behaviour,”
another agent said on eTNW.
Internationally, the practice of
reducing airfares and increasing
surcharges is also receiving
attention. Paul Hudson, president of
FlyersRights, a US-based non-profit
consumer organisation representing
airline travellers, told TNW that base
fares had become a smaller portion
of the overall airfare over the past
few years. He says there is a lack
of legal definition of what an airfare
should include.
Airlines continue to cite the rate
of exchange in South Africa as the
reason that fuel surcharges remain
high. They argue that the volatility of
our currency also necessitates
is that airlines want to offer
the lowest fare possible.
“They would advertise a zero
fare if they could, because
customers book them, even
when fees and taxes are
later added on to the final
cost.” He says although
airlines are legally required
to advertise the full fare,
somehow passengers are
still drawn to the “low” base
fare.
But Rodger maintains
airfare pricing is not that
simple and the ultimate
determinant of how much
the carrier can sell the
seat for (and therefore how
low the base fare needs
to be dropped) is what the
customer is willing to pay,
and the customer is spoiled
for choice in a domestic
open skies environment and
with the current oversupply
of airlift capacity.
Fare increases are not out
of the question yet either,
according to Hein Kaiser,
spokesperson for Mango.
“At this time, fare increases
are somewhat mitigated by
a much lower fuel price but
should the currency weaken
more it may impact future
travel costs.
