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