South African Airways reduces fuel levy on oil slump

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South African Airways (SAA) has become the latest carrier to reduce its fuel surcharge following the 30% decline in Brent Crude from its year high of $128.40, reached on 1 March.

With the oil benchmark now trading at an 18-month low of $90 per barrel, SAA says it will pass the savings on to passengers through a reduced fuel levy.

Chief executive Siza Mzimela said the largest price reductions will be implemented on flights to destinations where the carrier's jet fuel costs exceed global averages - a situation typically caused by supply and logistics problems.

"Although fuel prices remain higher [at these destinations] than elsewhere internationally, when oil prices drop, the reduction results in a larger actual saving to our passengers."

Average fare reductions of $15 per flight will apply on routes from Johannesburg to Douala, Libreville, Bujumbura, Kigali, Benin, Cotonou and Pointe Noire. Domestic fares will also fall by an average of $5 per segment, and long-haul services will come down by $7 per segment.

However, the benefit will be partly offset by SAA's decision to introduce a €1-2 ($1.25-2.50) levy on flights to Europe in protest at its Emissions Trading System (ETS).

Last week, Hong Kong's civil aviation department gave approval for three carriers - All Nippon Airways, Cathay Pacific and Singapore Airlines - to reduce their fuel surcharges. Japan Airlines (JAL) has also requested approval from Tokyo's transport ministry.