Airline companies are hopeful that Covid-19 lockdown level 2 allowance for inter-provincial travel will bring in much-needed revenue to the floundering industry.
After President Cyril Ramaphosa announced in his address on Saturday that citizens are now free to travel to see loved ones, prices on Flysafair shot up as the demand for tickets surged, with some customers complaining that the prices were too high.
Airlines have been hit hard by the Covid-19 pandemic as air travel was banned. Flysafair spokesperson Kirby Gordon said this was to be expected as the demand for tickets overtook supply.
"Flight prices are determined by the market, not the airline. The first seats on flights sell at the best prices and then fares rise as the demand increases and planes fill up – it’s all determined by supply and demand, the same way that commodity prices much like the prices of fuel, maize, shares or gold are determined," said Gordon.
He said the airline industry has faced enormous financial challenges in the past few months because costs persist even when planes are grounded.
"Aviation is a very capital intensive business. We have huge fixed and variable costs and very small margins. The average price of a flight on a low-cost airline in SA is usually about R1,000. In a strong year, an airline can hope to make about R25 to R30 per seat. The other R970 to R985 is all costs. At least 60% of these costs do not go away if we stop flying
"So, during this period of either bans on flying, or restrictions on travel, we’ve had to carry a huge amount of costs with no revenue to offset them. What’s more frightening is that our ability to claw back those costs is quite weak, so it’s going to take a long time," he said.
Gordon said they are hopeful that level 2 will bring more customers which they are prepared for with a number of safety measures, including but not limited to a no-touch policy between staff and customers, boarding in small groups with social distancing measures, disembarking row by row, sanitising and deep cleaning..
Meanwhile, holding company Comair, which has subsidiaries such as Kulula and British Airways, will not be operating until November after announcing entering into business rescue in May.
SAA spokesperson Tlali Tlali said the embattled airline will continue to cease all operations except repatriation flights due to international and regional lockdown and because SAA is also currently in business rescue.
"An announcement will be made when we are ready, indicating when SAA will resume operations in the domestic market. As part of transforming the airline and restructuring the business, work is currently underway to have in place the required enablers [including funding], that will ensure that we resume operations soon," he said.
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