The airline industry has been dramatically impacted by the Covid-19 pandemic, and recovery has been bumpy.
Airlines have gone into liquidation, new entrants have emerged, and ticket prices have increased due to limited seating and the rising cost of jet fuel. Travellers now face long queues, exorbitant charges, and delayed or cancelled flights.
JustMoney.co.za, which helps South Africans to make the most of their hard-earned money, spoke to Linden Birns, owner and managing director at Plane Talking, an inflight products supplier, to shed some light on the issue and offer some handy pre-holiday tips.
The current state of play
Birns explains, “South African Airways operates at only about 10% of its routes since it went into business rescue, and doesn’t have as many aircraft as before. Comair grounded its British Airways and Kulula flights in May, and Mango is no longer flying. A lot of capacity has been taken out of the air.”
While remaining airlines FlySafair, Airlink, Cemair and Lift will try to add capacity where they can by using their existing fleets and acquiring additional aircraft where possible, people may still struggle to find tickets – let alone appropriately-priced options.
Inflationary environment
Those airlines that are operating are still in post-pandemic recovery mode. During the pandemic, they incurred a lot of debt to stay afloat. Now they are trying to clear that debt, while operating in an inflationary environment.
The situation is exacerbated by the war between Russia and Ukraine and the escalating oil and fuel prices, which have a negative impact on the jet fuel price and availability.
Birns says the gap between jet fuel and crude oil prices has almost trebled. Historically, jet fuel was priced at around $15 to $20 a barrel, but it is currently between $50 and $60. This has had a huge impact on airlines’ cost bases, with jet fuel now twice the price it was in October 2021.
South Africa no longer manufactures fuel in sufficient volume, which means we are heavily reliant on imports. This adds the cost of shipping, local transport and storage facilities to the airline industry’s burdens.
Another factor is the floods in Durban earlier this year, which washed away the main railway lines that were used to transport jet fuel from Durban harbour to Gauteng. Alternative plans had to be made, such as bringing fuel overland from Maputo.
Added to this are high interest rates, which are pushing the cost of financing, along with the rand weakening against a surging dollar. The additional expenses the airlines must pay are passed on to the public, who are probably paying 60% to 70% more than they were in 2019 or early 2020.
Birns warns that last-minute bookings and standby discount tickets, which benefited flexible travellers in the past, may no longer be available. “You’re unlikely to find such tickets,” he warns.
Tips for travellers
Shafeeka Anthony, Marketing Manager of JustMoney, says, “It’s essential to do your homework before parting with your hard-earned cash for the holidays. Before you take out your credit card and book a flight, calculate what the entire trip will cost you, and check that this falls within your budget. Then, search for the best possible deal, while being aware that there are often hidden costs involved when booking a holiday.”
- Read a JustMoney article on how to budget for recreational activities.
Some tips from JustMoney.co.za for getting the best airline deal include:
- Book your tickets early if you have holiday plans, to avoid capacity constraints.
- Use flight deal search websites to compare prices, and stay incognito while searching. This prevents cookies from accruing, and thus prevents the lowest pricing from being blocked.
- Be flexible with your travel dates and consider flying during an off-peak day or time.
- Make the most of rewards programmes and use points built up via your bank or gym membership. Paying with your credit card should ensure you have built-in insurance and can earn more points.
- Check out budget airlines, but be aware of additional charges for seat selection, meals on board, and luggage. Compare these with a full-service airline.
- If you plan to travel overseas, check out alternative airports close to your destination. For example, London has not only Heathrow, but also Gatwick, Stansted and London City Airport.
- Domestic flights tend to be cheaper than international flights that cover the same distance. It could be worthwhile going by rail or bus to cross a border, and from there using a domestic flight.
- Travel light. Hand luggage is usually free. If you require extra baggage, book online when buying your ticket, as this is cheaper than paying at the airport. Weigh and measure your luggage to ensure it meets airline specifications.
- Flights with layovers (intermediate stops at airports of up to 23 hours) and stopovers (stops of more than 24 hours between the arrival of one flight and the departure of the next flight) take longer to reach your destination. However, the savings could be worthwhile, and if you extend your stopover by a few days, you can visit an additional country.
“Given that airlines are experiencing staff shortages, thousands of cancelled flights, and lost baggage, a final tip is to ensure that you read the fine print so that you are aware of how the airline will assist you if there are problems,” says Anthony. “Paying a little more for a ticket that includes flight flexibility, and purchasing comprehensive insurance, could pay off in the long run.”
