Travelstart.co.za reports that although air ticket prices have dropped, consumers are warned of increases as the industry seeks stability.
Due to competition within South Africa’s local airline industry we have seen prices drop to as low as they were back in 2012. But, how sustainable is this downward trend?
Analysts at Travelstart South Africa say the decrease in fare prices on certain routes could be detrimental to the growth of the commercial aviation industry and warn consumers to prepare for increases.
A surge in demand for local flights at low prices coupled with an increase in the capacity of providers operating scheduled services on high volume routes such as Johannesburg to Cape Town has further driven down ticket prices in recent months. However, as the main cast continue to out seat sale each other in a bid to win consumers over industry experts predict a shift away from uncharacteristically low fares.
"Sale extravaganzas and consumer delight have little long-term benefit for airlines," said Russell Jarvis, Head of Communications for Travelstart, "Prices are likely to bottom-out soon as the airline industry responds in favour of market stability and long term, healthy competition."
There has been an 85% increase in bookings between Johannesburg and Cape Town compared to last year and a 79% increase in the route from Cape Town up to JHB. There has also been in increase in the routes between JHB and Durban.
But, the industry may have been revitalised by four new local carriers but the distressed seats and rising operational costs affect the profits.
"When you consider that most airlines need to be selling a seat for at least R900 -“ R1000 one way, and have a load factor of 70 -“ 80% on each flight that takes off just to make a marginal return, it stands to reason that the low ticket prices available at the moment will soon be a thing of the past," said Jarvis.
Travelstart conducted an analysis of fares across all airlines operating between Johannesburg and Cape Town and it showed that the average price per passenger has decreased by 28% since last year. The average flight price from Johannesburg to Cape Town decreased from R1047* in 2014 to R759* in 2015 while the average price for a flight from Cape Town to Johannesburg decreased from R933* in 2014 to R713* in 2015.
"In recent months we’ve seen a decrease in the price of local air ticket prices, however, the market is starting to stabilise," said J.Malik, Skywise Co-Chairperson. "Low fares have allowed the public to try new airlines and taste the products and services they offer. Skywise is very happy with the warm reception we’ve received from customers and we want to continue to offer affordable fares while adding increased value to what we currently offer -“ free coffee/tea, 20kg free checked luggage allowance and our signature red carpet VIP treatment. The good news for consumers is that we will add more routes soon, as well as beefing up our fleet size."
One thing that does seem likely if fares remain at the current level, at least one airline will suffer the consequences. While the all too common R499 one way specials may soon become a thing of the past, flyers can perhaps look forward to competitively priced fares and a wider choice of airlines in the long term.
