Airline Taxes Explained – Answer to Pieter – FAQ Fridays

This week on FAQ Friday we answer Pieter’s question about airline taxes:

Video Transcription:

Last week we were asked the following by Pieter:

“It baffles my brain if I look at the various airlines airport taxes they charge. Please explain to me how Emirates can be so cheap and lets say Thai airways charge more for taxes than the flight ticket. I don’t believe the difference can be so big”

This is a great topic! So let’s see if we can clear up the confusion.

First we have to admit that the term “tax” is probably a misleading one as only some of the fees on a ticket, which make up the “taxes” are in fact tax.

The airlines usually include fees levied by the airport such as passenger levies, or fees levied by the government, such as security fees and departure taxes. These are usually set fees per passenger. It’s only if you’re travelling locally in South Africa that the government will actually charge you VAT on the fare.

But then comes the biggest whopper; the fuel surcharge. This is a fee which is usually worked out in US Dollars and is determined by the airline in question for each of its routes.

Now once upon a time (and those of you who were travelling in the 90’s can vouch for this) flight ticket taxes were only a couple of Rands, if anything at all. You were still paying the fuel surcharge, but it was part of the fare and didn’t change very often. Then something called 9/11 happened and the world went into panic mode with fuel prices skyrocketing with the threat of war looming. A few airlines saw both some growing problems and a very obvious solution.

The first problem was that fares were loaded into booking systems long in advance with airlines having little ability to up the fares at short notice.
The second problem was for tickets bought on frequent flyer miles. These usually meant the fare (with the fuel surcharge included) was free and the passenger paid only the taxes, but with the fuel price going up, the airlines saw their profits going down.

The solution was simple: seeing as everyone has to pay taxes and they can be changed at the drop of a hat, they moved the fuel surcharge to the taxes and adjusted it as needed.

This started the trend of the taxes quickly becoming larger than the fares themselves. Today a fare to London on Lufthansa can cost you only R100 … Plus over R8500 in taxes.

Many unscrupulous travel agents continued to advertise fares without taxes, which drove consumers mad. A side note here; all of Travelstart’s fares contain the flight ticket taxes in full.

One by one, airlines moved over to this system and began charging less and less for the fares and more and more for taxes. All airlines except one that is: Emirates.

Emirates is the last remaining, major, full-service, international airline which still keeps its fuel surcharge in the fare, meaning that on that ticket to London, Emirates taxes are over R6000 less than any other airline even though the total price is more or less the same.

So to answer Pieter’s question, that would be the reason why the taxes on Emirates were so much lower than on Thai. Just note that this doesn’t automatically mean that Emirates will be cheaper than another airline, so always refer to the total price for clarification.

Please remember to subscribe to our channel for more of these updates, and if you have any travel-related questions please ask them in the comments below.

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Our Readers Comments

  1. you need a teleprompter

  2. very interesting comment

  3. When i travel and the airline damages my bags,we normally are sorted out quite quick. However when i flew in december and Egyptair damaged my bags, they have been dragging their feet srting out my claim. What course of action do i have open to me?

    • Hi Siki,

      I am sorry to hear that you have been having trouble with your baggage. There is not much that one can do to speed up this process. Our suggestion to keep in contact with their local office.

      – Liam

  4. THIS LEADS ME TO ASK THEN WHAT ARE WE PAYING FOR IN THE AIRFARE TICKET? BOOKING A SEAT AND PAYING FOR A MEAL AND THE SERVICE ACCORDING TO CLASS? I FEEL THAT THESE PRICES SHOULD BE BROKEN DOWN FURTHER FOR US AND EXPLAINED WHAT ALL IS BEING CHARGED.

    • Yes you right

    • Hi Celeste,

      Essentially you’re paying for the airlines operating costs, the fees the airports charge the airlines need to be covered too, such as baggage handling, landing rights and so on. Also the fare will be covering stuff like airline staff salaries, bearing in mind there are not only the cabin crew and pilots to pay but also check-in staff and various office staff involved in the running of a business. And finally, of course, part of the money you pay goes towards making a profit – without which no business can function (except perhaps if you’re a national carrier). You must remember though that many airlines go bankrupt every year, the world over, it’s clearly a very cutthroat business where being profitable is a difficult state to achieve. Finally, just to provide a bit of context, the airline industry is one of the few business models which breaks down its fees as much as it does. Think about last time you bought a car, or went grocery shopping, the companies involved there never break down how many government taxes are included, how much rent they pay or what the cost in fuel was to transport the goods you purchased to the store.

      -Liam

  5. Why then do SAA charge MUCH more for taxes than Kulula and the Kulula fare is MUCH cheaper than SAin total?

    • Hi Paul,

      SAA’s fuel surge charge is much higher than Kulula on a round trip ticket between JHB and CT. SAA charge just short of R1000 for fuel, whereas Kulula charge only R100. SAA also put their fuel surge charge in the taxes, which Kulula don’t. Bearing in mind you pay VAT on the fare as well. With SAA being a full service airline, with a high fare, the VAT is going to be higher as well, than on a Kulula ticket. That is built into the taxes at the end.

      Also, low cost airlines try to have a very short turn around time at the airports which in turn means that they operate more flights per plane per day and also it means they pay less in airport fees as they spend less time taking up space on the airport tar mac.

      PLease let us know if you have any more questions,

      -Liam

  6. I fly every year to Europe for 3-5 month. The ticket is normally more expensive than a short time ticket. But I only have the same 23 kg. As you know, you have to have for Europe summer and cloth for cold waeather, so everytime I struggle with my luggage. My be you can give me an answer and a good salution.
    Flying on the 1.6. -8.9.
    Thank you
    Best regards Maria Schollasch

    • Hi Maria,

      Excess baggage is often very expensive direct with the airline, many people therefore opt for a service such as:

      http://www.u-bag.com

      – Liam

  7. Hi Nick, why are trips in the African Continent so expensive in comparison to a trip to Europe?

    • Hi Dave,

      Thank you for the interesting question. It is hard to give a definitive answer, but here are some factors:

      • Lower levels of demand results in less airlines flying those routes, fewer airlines means less competition, less competition means the opportunity for higher prices to be charged as there isn’t a cheaper alternative.
      • – Also, lower demand for a route often results in airlines using smaller planes which are cheaper to operate for low passenger levels, however with a small aircraft, when dividing the operating cost between a smaller passenger base, it means the passengers pay more, even if the airline pays less in the long run.Lower demand = costs a lot for an airline to operate a large aircraft.
      • Infrastructure – getting fuel to various airports is more expensive
      • Corruption could play a role in driving out competition in favor of government owned airline

      – Liam

  8. Hi when Flitestar started in 1991 the departure tax was only R7 one way and Luxavia’s flight to Luxembourg was only R143.

    No wonder Pieter is confused by all these taxes and surcharges in the tax column, but one also have to bear in mind that there is still VAT on local tickets and not on international tickets.

  9. What is the rule about meals or drinks vouchers offered to passeneger if your flight is delayed.Yesterday we were delayed in JHb for 3 hours bound for Kimberley.There were a lot of angry passengers demanding meals and drinks.Does it make a diffrenece if it is over a meal time?

    PS enjoy your blog

    • Hi Wendy,

      Thank you for the question. This would very much depend on the airline that you are flying with.

      We are glad to hear that you are enjoying the blog. Please let us know if you have any more questions.

      – Liam

  10. Hopefully all can fare partial to the whole person, if it is possible then all can be resolved wisely

  11. why is SAA so expensive on there internal flights compare with other airlines in other parts of the world.

    • Hi Faseeg,

      Thank you for the question. If you take a look at equivalent airlines internal flights in the UK or USA they are actually very similar in price to SAA. One needs to remember that SAA is not a low cost carrier, and therefore prices on Ryan Air flights will be comparatively cheaper as they are a low cost airline.

      -Liam

  12. Hi,
    Thank you for the explanation, but still dont agree with what they doing

    • Hi Pieter, that’s a pleasure. Please let us know if you have anymore questions. – Liam

  13. how can i get a help or assistance in southafrica i need to fly.

  14. Hi Pieter,

    We recently bought tickets through Computicket to fly to London on 28 June 2014. We provided the agency with personal information that is correct together with passports. The tickets that we collected at Checkers had all the the correct information however on the e-tickets the surnames were misspelt by omission of one character. We have been endlessly trying to get Computicket to fix this and we are given the runaround. I have contacted the airline to rectify this and the airline says Computicket must fix this. According to the airline, it will be too risky for us to fly with these tickets as immigrations might give us problems in London. What recourse do I have against Computicket should I decide not to use these tickets and on the none refundable expenses already incurred.

    Nhlanhla

  15. You failed to answet the question.

  16. Not really applicable to me

  17. Sorry but this was SUCH A LIME LIES (video) and this explanation was more like a stupit EXCUSE it’s so not true what he says….ok…maybe 30% is…

    Please Travelstart update your data research and come up with BETTER excuse next time when u try to convince NON travellers.

    GO AND SEE RAYN AIRLINES WHAT HE WILL TELL YOU ABOUT THIS ISSUE.
    HE TELLS U THE TRUTH.

    I travel a LOT with different airlines and they are not so greedy and there prices are reasonable.
    South Africa is build on greedy people and businesses.
    That’s it.

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