Air travel is often deemed too expensive and unaffordable for many South Africans. And you’d be right to make that assumption. For example, a single flight for Tuesday, April 27, from Durban to Johannesburg on FlySafair, costs as much as R3 271.
However, many factors are considered when determining the cost of a flight, including the date and time the passenger books.
FlySafair chief marketing officer Kirby Gordon explained this in greater detail. He said that while flights seemed expensive, the airlines ran at a loss most of the time.
Gordon said when a passenger booked a flight ticket, the airline would have to pay a portion to aviation authorities. The airline would also need to pay VAT. He shared an example.
For a flight that costs R599, FlySafair has to pay aviation authorities R133. VAT is deducted from the new figure of R466. The airline is left with around R405. He said to operate a flight from destination A to destination B costs approximately R130 000.
If the airline operated at a maximum capacity of 165 seats sold, they would make only R66 825, which meant that they would run at a loss of R63 175.
“Pricing is quite complex and not really understood that well. The airline industry is still bleeding money. When an airline sells a flight, it’s traded on a market. What that means is that the supply and demand determine the pricing.
“For example, if the demand is low and supply is plentiful, then the price is really low. It will also be low if the trip is planned in advance. However, if they are booking closer to peak travel times, then the demand skyrockets. During that period, you get a high demand and high yield.
“While flights may seem expensive, the airline is essentially running at a loss. However, on some flights, airlines will make a profit due to the demand,” said Gordon.
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