Oil prices to hit tourism industry, warns aviation expert

What does the soaring fuel price mean for South African travellers, especially those wanting to go abroad?

United Airlines CEO Scott Kirby has warned that oil prices could hit $175 a barrel and remain above $100 a barrel until the end of 2027.

CapeTalk's Amy MacIver spoke to local aviation analyst Guy Leitch.

"It's an absolute nightmare. We've got used to fuel spikes in the past from these sorts of black swan events, but I think this time it'll be even worse, particularly if Scott Kirby's warnings hold any water, and I think they do. He does, after all, run the biggest airline in the world.

"But quite frankly, we've already seen the impact of the post-COVID recovery on South African travel in the sense that we've lost so many of the low-cost carriers. We've lost Kulula, we've lost Mango, we lost British Airways, and of course, we lost One Time before that, and not to mention SA Express.

"And our airline industry still has not recovered, and the reason for that is that disposable income is just not what it used to be. People are just not able to pick up the phone and book tickets and go away for the weekend anymore. So I think these prices are going to continue to stay exorbitant, and it's really going to depress demand for what we call discretionary travel."

He says business travel will also be impacted because people will go back to using Zoom rather than face-to-face, but he believes the real impact will be on discretionary travel.

"I was looking at a British Airways flight to London the other day, and that was over R50,000 return. Very few people are going to be able to afford to fly their families at those sorts of prices.

"So I'm seeing a significant knock-on effect on tourism and just the airline industry as a whole."