Escalating fuel prices could see more and more airlines introducing fuel surcharges – putting pressure on already overstretched shippers.
This was the general consensus among airfreight industry representatives contacted by FTW, with South African Airways (SAA) Cargo acting GM, Justice Luthuli, pointing out that fuel surcharges were adjusted regularly in line with the fuel price changes.
“We assess the markets and respond accordingly. In this case, as a business, you are bound to try and find a balance to be financially viable and also take into consideration the financial strain faced by customers,” he said. Commenting on how fuel surcharges could affect airlines’ competitiveness, Luthuli pointed out that airfreight was a “highly competitive” industry with ever-changing demand patterns, depending on environmental conditions, which meant that airlines with bigger operational budgets could seize the opportunity to gain market share and offer lower freight rates.
He told FTW that the higher fuel prices had had a negative effect on exports as they had driven up the price of exports, leading to decreased demand. “In essence, higher fuel prices impact on the entire rate composition,” added Luthuli.
