Passengers planning trips in the coming weeks should be prepared for increased expenses, as South African airlines warn about the impact of the recent surge in global oil prices on airfare costs. Some carriers have already begun adjusting their fares to offset rising fuel expenditures.
This increase is attributed to renewed instability in the Middle East, which continues to drive up the price of aviation fuel. This places additional pressure on an industry that has spent years trying to recover from previous fuel price shocks. Recent price hikes are linked to the conflict between the United States and Iran, which began earlier this year and disrupted one of the world's busiest oil supply routes.
The temporary closure of the Strait of Hormuz, through which about 20% of global oil supplies typically pass, caused turmoil in energy markets. As supply tightened, the price of Brent crude exceeded $100 per barrel in April, triggering a sharp rise in fuel prices across South Africa.
While motorists felt the effect at gas stations, airlines have also suffered due to the sharp increase in the cost of Jet A1 aviation fuel. Unlike gasoline and diesel sold to consumers, aviation fuel prices are directly tied to international oil markets, making airlines vulnerable to sudden price fluctuations.
FlySafair was one of the first local airlines to react to the oil price hike at the beginning of the year. In March, it introduced a variable fuel surcharge, which was reviewed weekly based on global fuel prices. Initially, passengers paid an average surcharge of around 176 rand, but in April, when fuel prices peaked, some domestic flights temporarily had additional charges of approximately 830 rand.
Although these costs decreased after the temporary ceasefire reopened the Strait of Hormuz in June, the surcharge did not disappear entirely. Due to escalating tensions, FlySafair confirmed an increase in this surcharge, and passengers now pay about 310 rand, although this amount may change depending on aviation fuel prices. The airline informed Business Tech that it intends to cancel the surcharge once market conditions stabilize but could not provide a timeline due to the uncertainty surrounding the conflict.
However, not all airlines implement a separate fuel surcharge. CemAir told the publication that it decided not to introduce an extra fee despite higher operating costs. Instead, the airline adjusted its fare structure by reducing the number of available low-cost seats on certain flights.
CEO Miles van der Molen stated that travelers should expect further ticket price increases across the industry if fuel costs continue to rise. He also warned that fluctuations in the rand exchange rate could exert additional upward pressure on prices.
Domestic carrier LIFT notes that airlines are in a difficult situation. While higher fuel prices almost immediately increase operating costs, passing the full increase onto customers risks a decline in air travel demand. According to Chief Commercial Officer Cilliers Jordaan, the latest spike in oil prices quickly reversed the short-term relief that airlines had experienced earlier in July.
He told the publication that airlines generally prefer to absorb some of the additional costs where possible before gradually adjusting ticket prices to avoid being driven out of the market. Nevertheless, Jordaan noted that many carriers are still recovering from previous fuel price increases and have not yet fully compensated for those early losses. Since oil markets continue to react to geopolitical events almost daily, there is little certainty about when fuel prices will stabilize. For travelers from South Africa, this means that domestic airfares may remain unpredictable in the coming months.
Inflation in South Africa reached its highest level in two years in June, driven by a sharp increase in fuel prices. This rise in transport costs has become a significant burden for drivers and passengers amid ongoing geopolitical tensions affecting the local economy.
According to a report from Statistics South Africa (Stats SA) on Wednesday, annual consumer price inflation accelerated to 5% in June, up from 4.5% in May. This figure exceeded market expectations of 4.7%. This growth marks the fourth consecutive monthly increase and the highest rate since June 2024, when it stood at 5.1%. This may force the SA Reserve Bank to adjust the monetary policy rate to slow down inflationary acceleration.
Monthly consumer goods prices rose by 0.7%, matching the increase seen in May. The transport sector contributed the most to this rise, where annual inflation jumped from 9.4% in May to 12.7%. Patrick Kelly, Chief Director of Stats SA for Price Statistics, emphasized that higher fuel prices were the dominant cause of this acceleration.
Fuel prices increased by 34.3% over the last 12 months, with diesel rising by 50.8% and petrol by 31.7%. The main driver of these increases was high global oil prices linked to the conflict involving Iran. The higher cost of fuel was quickly reflected in public transport, leading to a sharp rise in inflation in this category. Passenger transport inflation showed a monthly increase of 8.1%, bringing the annual rate to 12.5% from 4% in May.
Over the month, minivan fares rose by 11.5%, ride-sharing services increased by 8.7%, long-distance bus fares rose by 8.4%, and school transport costs increased by 3.7%.
Housing and utilities also exerted pressure on inflation, where annual inflation reached 5.5%. Water supply costs increased by 6.9%, while prices for electricity, gas, and other fuels rose by 3.9%. Rental inflation also accelerated following a quarterly update included in the consumer price index. Actual rent rose by 1.1% compared to the March quarter, pushing annual rental inflation to 4.1%. Over the year, townhouse rents increased by 5.4%, apartment rents by 4.6%, and house rents by 3.7%.
Underlying price pressure intensified: core inflation, excluding food, fuel, and energy, reached 4.1%, the highest level since September 2024. Despite overall inflationary pressure, food price inflation remained relatively moderate.
Inflation for food and non-alcoholic beverages continued to decline, standing at 1.6% in June compared to 1.9% in May and 2.9% in April. Kelly noted that some staple foods became cheaper. Cereal products showed deflation for the fifth consecutive month (-1.5%), and white rice prices fell by 13.4%, while cornmeal prices dropped by 5.9%, with porridge decreasing by 1.3% compared to the previous year.
Meat inflation also slowed, falling to 5.1% from a recent peak of 13.5% in January. Ground beef inflation sharply slowed to 3.9%, and stewed beef entered deflation territory (-2.7%). However, some food items remained under pressure: pork inflation remained high at 13.9%, while lamb and mutton inflation accelerated to 8.4%. Processed meat products also showed notable growth: sausages rose by 11.8%, ham by 10.2%, and bacon by 8.6%.
Hot drinks also remained a source of persistent inflation, with annual price growth at 7.4%. Black tea rose by 8.3%, and instant coffee became 7% more expensive compared to last year. The June inflation results demonstrate how external energy shocks are increasingly influencing domestic prices, as higher fuel costs spread to transport, services, and overall inflation, even though food prices remain relatively stable.
