Bad news for anyone planning to book flights in South Africa
The surge in jet fuel prices has put massive pressure on airlines and, ultimately, ticket prices in South Africa.
While motorists have been hit with a notable rise in petrol and diesel at the pumps, the increase in aviation fuel has been far more severe.
This is the feedback from Aviation analyst Guy Leitch, who said in an interview with 702 Drive that the price of jet fuel has more than doubled over the past month due to the conflict in the Middle East.
Leitch stressed that the implications are being felt worldwide, not just locally. He also noted that airlines have already begun adjusting operations in response to the cost pressures.
“They’re reducing certain route flights on certain routes, ones they describe as unprofitable, while they’re expanding others,” he explained.
Citing international carrier Lufthansa, he said these changes affect about 20,000 flights, with projected jet fuel savings of more than 40,000 metric tons.
While that sounds significant, Leitch noted the airline itself suggests the impact is relatively contained, affecting roughly 1% of available seat kilometres.
Leitch explained that the root of the problem lies largely in geopolitical tensions in the Gulf. He noted that multiple key refineries have been damaged during the conflict involving Iran.
“The best estimates are that it’s going to take at least six months or longer to get those refineries back into a reasonable facsimile of full-scale production.”
This has created uncertainty around supply, which is just as problematic as actual shortages in terms of jet fuel.
Airlines typically sell tickets months in advance, locking in prices long before the actual cost of fuel is known.
“Airline tickets are often sold six months or even a year in advance, so the airlines are really keen to have some sort of security as to what the fuel prices might be going forward.”
Impact on ticket prices is unavoidable
Locally, this uncertainty is already feeding into pricing strategies. Some airlines have introduced explicit fuel levies, while others are adjusting fares more dynamically.
“Some of the airlines locally have imposed an explicit fuel levy. Others are simply adjusting the prices as the cost of jet fuel shoots up and down,” Leitch said.
He added that the real increase may be even steeper than official figures suggest, estimating that prices have climbed from around R11.50 per litre to as high as R25 to R28 per litre of jet fuel.
Given that fuel typically accounts for 30% to 35% of an airline’s operating costs, the impact on ticket prices is unavoidable.
“It’s still absolutely horrendous,” he said, warning that elevated costs are likely to persist for some time.
Airlines are already responding by cutting back on less profitable routes. “That’s already happening. We’re already seeing flights being combined or cancelled on the less profitable routes,” Leitch said.
He added that this is because demand for flights is highly sensitive to price increases, highlighting that even modest fare hikes are discouraging travel. However, this drop in demand could offer some relief to the industry.
“As demand falls off for seats, obviously demand will fall off for fuel as well, and that might give the whole industry the breathing space it needs,” he explained.
In that sense, capacity cuts could help stabilise the situation by easing pressure on constrained fuel supplies.
Despite this, the broader economic consequences are significant. Leitch emphasised that reduced air connectivity has ripple effects across tourism, trade, and business activity.
“Every dollar spent on an airline ticket creates another $10 in the economy of direct benefits,” he said, adding that indirect benefits can be as high as $30. These include everything from tourism spending to business travel and air freight.
“The knock-on effect of an increase in price or a drop-off in supply is absolutely enormous to the broader economy,” he warned.
Despite these negatives, Leitch is firmly against government intervention to cushion the blow. “I’m very opposed to subsidies because they completely distort the market, and they’re not sustainable,” he said.
He also argued that subsidising aviation would disproportionately benefit wealthier travellers.
“Any subsidy of aviation is a subsidy of the rich at the expense of the poor,” he said, and added that countries like South Africa should prioritise basic needs over lowering airline costs.
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