Advertised price is a flight of fancy
Why do travel agents punt deceptive ticket prices when none of the so-called ’taxes’ are negotiable?
IT is that time of year when travel advertisers come out in full force, hoping to gain their slice of the lucrative festive season pie.
It is also prime time for travellers to be taken for a ride. Many airlines and travel agents advertise prices inclusive of all the extra airport and airline fees, but not all of them do.
A typical way to con consumers on the price is for airlines to advertise in bold only the basic fare. The real cost of the ticket is buried in tiny print, despite it being a significant portion of the costs, usually adding thousands to the advertised price.
Thai Airways has been guilty of this. Its quoted fares look hugely attractive until you spot the “estimated tax” written in minute font. This can add as much as R7 000 to the fare.
But the airline is hardly alone in doing this. Many suppliers, including Thompsons Holidays, do the same.
Why? Who cares what the basic fare is when it is just a portion of the ticket? It is like advertising a car price minus the cost of the tyres and steering wheel.
An airline ticket is the sum of the basic fare and the standard charges. The two do not exist independently. Four of these five fees are set in stone; the only one that fluctuates is the fuel levy.
There is simply no escaping these charges, nor is there any room for haggling.
Considering this, it is hard not to see the advertising of the basic fare as being anything but deliberately deceptive.
Under the Consumer Protection Act, a supplier cannot mislead or deceive a consumer on price. This practice also violates the code of conduct of the Association of South African Travel Agents and that of the Advertising Standards Authority.
As for these extra fees and charges (the ones advertisers like to hide), what exactly are they for and who benefits from them?
Easier asked than answered. It took me more than a month to get the information from local airlines. You would think a userfriendly, detailed breakdown of these costs would be readily accessible to consumers.
The best breakdown you get from airlines is a basic fare with separate charges for what they commonly refer to as “airport taxes”. These “taxes” are usually broken down into a passenger safety charge, passenger tax, passenger service charge and a fuel levy, which takes into account fluctuating oil prices and exchange rates.
Well, here is the thing. Other than VAT on all airline tickets, there is only one other tax charged on a ticket. It is called an air passenger tax and it is charged on outbound flights only, by the only agency empowered to tax consumers: the South African Revenue Service.
The rest have nothing to do with SARS or tax (see info box).
Instead, they are separate fees payable to the Civil Aviation Authority, the Airports Company of South Africa (Acsa), the airlines and Aviation Co-ordination Services (ACS), which is owned by the airlines. Half are regulated.
Sometimes they equal the cost of the flight itself and at other times are as high as a third of the total fare:
A South African Airways economy return ticket in October between Johannesburg and Durban cost R600 for the flight and R1 316 in added charges. These included R84 VAT, R32 CAA fee, R40 ACS fee, R240 Acsa fee and R920 fuel levy.
An SAA return economy ticket to London on the same day cost R9 978 and more than a third of the cost (R3 846) came from extra charges.
A R3 943 British Airways Comair ticket in November from Cape Town to Johannesburg cost R2 040 for the flight and R1 903 in charges — almost half the total cost.
Interestingly, a booked R1 775 Kulula flight from Lanseria to Cape Town in December includes fees of R415. The passenger charge is lower at R173 (compared with Acsa’s R240), and the security charge of R20 is the same as the ACS charge. Lanseria is not an Acsa airport and ACS does not operate there.
On most airlines that operate different cabin classes, the fuel levy varies per cabin. Consumers in higher class seats pay more because more luggage and greater leg room take more space and use more fuel.
Not all the airlines charge separately for fuel price changes — low-cost carriers Mango and Kulula build this cost into their basic fare. Others, such as BA Comair, charge roughly between R650 and R900 for their domestic flights. SAA did not provide me with its range.
The Acsa charge is regulated, but it is not a tax.
“The term ‘airport taxes’ is often used for all charges, costs and taxes recovered through the air ticket, thus creating an impression that ‘airport taxes’ accrue to Acsa. This is not the case,” said Acsa spokeswoman Unathi Batyashe-Fillis.
Indeed. But why are there “impressions” to create in the first place? Surely these charges should be transparent and provided in detail on the ticket or at least online?
It is impossible to do on a ticket, according to the chief executive of the Airlines Association of Southern Africa, Chris Zweigenthal, because there is not enough space. “If you buy an airline ticket, it is best to get a breakdown of the price applicable to the itinerary either on the website or from a travel agent,” he said.
As for an online list, there were “hundreds of taxes and charges worldwide” and a comprehensive list would “confuse the public even further”, Zweigenthal said.
But it is not just travellers who are unhappy with the added fees. Asata CEO Otto de Vries said the travel industry had issues with Acsa’s fee, as well as the fuel levy. “Passenger numbers are down year on year,” he said. “The high Acsa charge impacts negatively on passenger volumes.”
The issue of fuel surcharges, he said, was one that Asata had been engaging the industry on since 2009.
Airlines had been allowed by the International Air Transport Association to use one of the designated tax boxes on the industry’s booking system for their own use and had generally done so “inappropriately”, said De Vries. “The collection of fuel surcharges within these boxes has been deceptively termed as a tax.”
He said the airlines had chosen to price the charge in US dollars and not rands, making the amount fluctuate in accordance with the local currency’s exchange rate.
“Consumers should not be prejudiced by the airlines’ business decisions,” said De Vries. “If a hedging strategy is used by the carrier, the effects of that should be treated as an operating cost and should be included in the airline’s base fare.
“Asata is of the opinion that this can and should be done.”
Tune in to Power FM’s ‘Power Breakfast’ at 8.50am tomorrow to hear more from Megan