00:01South African airlines are feeling the pinch. Fuel prices have jumped over 70% since tensions in the Middle East
00:08escalated after February 28th.
00:10To cope, some carriers are raising ticket prices, passing the cost straight to travelers.
00:18The conflict in the Middle East and obviously the restraint on the movement of fuel around the world really has
00:24had a severe impact on the price of jet fuel.
00:26So we've seen increases in the beginning. It was about 70% in some of the coastal regions. That's gone
00:30up even higher now.
00:32Some experts say airlines might be moving too fast. Jet fuel prices don't always jump in line with crude oil,
00:39so ticket hikes could be premature.
00:42Globally, the standard for airlines to hedge their fuel prices is 6 to 12 months and they hedge as much
00:49as 80 to 85% of their fuel.
00:51That means that they're locking in their prices for the next 6 to 12 months.
00:55So there shouldn't be this immediate knock-on effect that the airlines are claiming in terms of jet fuel.
01:01With fuel costs climbing, passengers are paying more to fly and analysts warned the squeeze could soon ground demand.
01:08The big concern I have is that discretionary travel will suddenly become that much more unaffordable and the demand will
01:15drop off quite sharply.
01:17And so we'll see, well obviously, less seats, we'll see less demand for seats, we'll see less actual flying, we'll
01:24see airlines beginning to combine flights,
01:26and the industry's growth is going to be quite remarkably slowed if not actually reversed.
01:32The impact goes beyond higher fuel costs. With the Middle East a key aviation hub, flights are being rerouted and
01:39some services suspended.
01:40South Africa, which relies on imported aircraft parts, disruptions are hitting airlines right where it hurts.
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