High airfares deter domestic air travel for SA businesses

It is common knowledge that the cost of air travel in South Africa has increased sharply since 2020. The onset of the Covid-19 pandemic has put added pressure on the global aviation sector.

HIGHER AIRFARES

The cost of air travel in South Africa has increased by up to 54% compared to pre-Covid19 times for domestic flights, according to Businesstech.

The higher price of airfares is not only impacting the pockets of private individuals but also the travel spend of businesses in the country.

REDUCED TRAVEL FOR BUSINESSES

According to Travelnews, companies are voicing concerns about high travel costs for domestic flights.

In a study conducted among 33 corporations Professor Berendien Lubbe from the University of Pretoria found that the cost of air travel was an obstacle for companies that spend on business travel.

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TIGHTER BUDGETS

More than half of the respondents in Lubbe’s study indicated a travel spend of more than R10 million per annum.  Lubbe found that the cost of air travel was a major concern for the companies surveyed.  

“Business travel is highly lucrative for airlines, but with several international research studies suggesting that business travel will remain constrained due to tighter budgets and new ways of virtual working, airlines must review their service offerings in this market,” Lubbe said, per Travelnews. 

DISTRUST IN SA AIRLINES

The financial instability of SA’s airlines, driven by the increased costs of doing business, was also identified as a top concern for businesses.

Lubbe found increased levels of distrust in SA’s aviation sector, with 44% of survey respondents saying that they expected to see more domestic airlines exiting the market within the next two years. 

SA AVIATION LANDSCAPE

SA’s aviation landscape has seen some major adjustments in recent years. The collapse of privately-owned Comair last year removed two major airlines from SA’s skies: Kulula.com and the local British Airways franchise.

South African Airways (SAA) underwent a protracted business rescue procedure and resumed operations in September 2021, but on a much smaller scale.

The national carrier now only operates domestic flights between Johannesburg and both Durban and Cape Town. The defunct Mango Airlines and SA Express Airways, which were both owned by SAA, operated a number of domestic routes in the country.

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