Warning over air ticket prices in South Africa

South Africa’s remaining domestic airlines are likely to remain under pressure for the next four to five months, says FlySafair CEO Elmar Conradie – with limited flight capacity and rising input costs keeping ticket prices higher than before.

Speaking to ENCA on the sidelines of a tourism conference this week, Conradie said that South African airlines are currently under pressure following the closure of half the businesses operating in the space over the last year.

Of South Africa’s eight domestic airlines that were in operation pre-Covid-19, only four remain: FlySafair, Lift, CemAir and Airlink. Other airlines – SA Express, Kulula, British Airways and Mango – have all been grounded or liquidated, taking significant capacity out of the skies.

In the post-Covid months, Conradie said that there had been a lag between supply and demand for air travel in the country, with demand bouncing back almost immediately but airlines struggling to restore capacity.

“Domestically, demand bounced back very quickly, and there isn’t enough capacity to meet it. There are not enough flights. Regionally, there are administration issues, especially around licences,” Conradie said.

Following the closure of Comair, the industry lost around 40% of its flight capacity. The loss of SA Express and the grounding of Mango have only exacerbated this.

He added that there are a lot of routes that are left unserviced. Things are improving – but it’s a slow process.

The FlySafair lead said that ticket prices remain high, due in part to a supply and demand issue, but more with a lack of supply rather than a remaining few airlines trying to corner and exploit the market.

He said that this demand – or rather, lack of supply – is driving prices and that the problem will likely remain for the next four to five months as airlines move to boost capacity.

To address this, FlySafair added more flights at the start of September 2022, with even more flight capacity being launched in October, Conradie said. The group hopes to get additional planes in the sky by December – bringing three new planes in total – with further capacity coming in 2023.

However, Conradie noted that it’s not exclusively supply-and-demand issues driving up ticket prices. Input costs for airlines have climbed significantly, he said – fuel prices for airlines have doubled, and the rand’s weakness against the dollar has also caused maintenance costs – which are priced in dollars – to shoot up.

All of these factors, in combination have led to higher prices.

The CEO noted that with the capacity issues and high costs being a deterrent, the domestic market has not yet returned to pre-Covid (2019) levels, currently at about 70%. The international market is slightly weaker at 67% of pre-Covid levels.

He said that the airline industry, tourism industry and the government need to work together to make the market work.

Quick wins that would have an immediate impact and boost the sector would be to cut red tape around visas, introduce more eVisas, scrap visa requirements for more countries, and be quicker in processing tourism licences, said Conradie.

Over the longer term, Conradie added that opening up the skies across Africa by deregulating traffic rights would go a long way in stimulating travel and tourism in South Africa.

Read: How much it costs to fly South Africa’s most popular routes right now