An aviation expert has shed light on the real reasons behind high flight ticket prices, revealing that airlines themselves only earn about 14.65% of their total revenue per passenger from ticket sales.
The remaining costs, including taxes and fees imposed by governments, play a significant role in driving up airfare prices, especially in South Africa.
According to businesstech.co.za, South African airlines have been criticised for what they have described as “exorbitant” ticket prices.
The Parliament Portfolio Committee on Trade, Industry, and Competition has called for the Competition Commission to investigate.
However, an aviation expert has pushed back against the criticism, highlighting that airlines themselves are not solely to blame for high travel costs.
Earlier this week, committee chairperson Mzwandile Masina raised concerns that rising airfares have made domestic travel inaccessible for many South Africans.
Masina singled out budget carriers like FlySafair, Lift, and CemAir, accusing them of driving up ticket prices to levels unaffordable for most citizens.
READ: Aviation: The Challenges Facing Low-Cost Carriers in South Africa: Are They Truly Affordable?
He emphasised the need for an inquiry to ensure affordable mobility between provinces.
However, Linden Birns, managing director of an aviation consultancy, has painted a more nuanced picture.
Speaking with CapeTalk, Birns noted that South African airlines operate under unique and challenging conditions that drive up costs.
Birns explained that the affordability crisis in South African air travel is partly tied to broader economic factors.
On average, a domestic ticket in South Africa costs 2.8 weeks’ worth of income, while international flights require 6.5 weeks’ income.
By contrast, passengers in the European Union spend approximately three days’ income on local flights and less than a week’s income on international travel.
Despite this, South African airlines earn just a fraction of what their global counterparts make per passenger—R17 per flight compared to the global average of R116.
This means local carriers generate only 14.65% of the revenue per passenger that airlines worldwide enjoy.
“Airlines are not the villains here,” Birns said, highlighting that a significant portion of ticket costs stems from government-imposed taxes and levies.
These charges can account for up to a third of the total ticket price, creating a heavy burden for both airlines and consumers.
Domestic airlines in South Africa are subject to several government taxes and levies.
These include excise duties on jet fuel, often influenced by international oil prices, a flat air passenger tax imposed on all departing domestic passengers, 15% VAT applied to domestic airline tickets and ancillary services, and carbon taxes—among others.
These charges significantly inflate operating expenses, leaving airlines with razor-thin margins.
Birns stressed that government intervention, such as reducing these levies, could make air travel far more affordable.
The situation illustrates a unique situation where South African airfares are disproportionately high relative to average incomes, yet local airlines struggle to achieve notable high profitability.
With ticket prices seen as exorbitant by many, a public perception of greed has emerged.
However, Birns emphasised that the root cause lies not in airline pricing strategies but in a mix of structural and regulatory challenges.
The debate highlights the complexity of South Africa’s aviation landscape, where high costs reflect not just airline pricing but also the broader economic environment.
A collaborative approach—balancing government policy reforms and industry innovation—may hold the key to unlocking affordable air travel for South Africans.
