The South African aviation sector, despite having shown its remarkable recovery post COVID-19, still seems to be at the forefront of a variety of challenges being thrown its way. Among the various tariff increases, regulatory red tape and the various challenges that come with operating on the continent, are the fuel challenges constantly looming on the horizon.
The South African Civil Aviation Authority (SACAA) is moving forward with its planned fuel levy increases, with the next phase set to come into effect on 1 April 2025. This will mark the second of three consecutive hikes, aimed at bringing fuel levy rates in line with the Consumer Price Index (CPI) and ensuring compliance with international aviation standards.
The Fuel Levy Increase for 2025
From 1 April 2025, the fuel levy will rise from 21.85 cents per litre to 22.86 cents per litre, marking a 1.01 cent per litre increase. This increase follows the hike that took place in May 2023, and is part of a broader three-year plan to align the fuel levy with the rising CPI.
Here’s a breakdown of the fuel levy increases for the upcoming financial years:
| Year | CPI (%) | Cents per litre | |
| 2023/24 | 4.8% | 21.83 | |
| 2024/25 | 4.7% | 22.88 | |
| 2025/26 | 4.6% | 23.91 |
By 2025/26, the levy is expected to reach 23.91 cents per litre. This ongoing increase will continue to impact the operational costs for airlines and aviation-related businesses, with a potential knock-on effect on ticket prices for passengers.
The SACAA States the Increase is Justified
The SACAA has defended the need for these incremental increases, citing the necessity of complying with international aviation regulations. The increased levy is a measure to maintain South Africa’s adherence to the International Civil Aviation Organisation’s (ICAO) Standards and Recommended Practices (SARPs). Additionally, the increase is seen as a means of ensuring the sustainability of the aviation sector amidst fluctuating fuel volumes and revenues.
In its justification, the SACAA pointed out that despite the return of many commercial airlines, volumes of freight have shifted, with cargo now being carried in the holds of passenger flights. These changes have impacted the fuel levy collection, as passenger flights do not contribute to the levy in the same way dedicated cargo flights do.
The SACAA also noted that fuel volumes in the general aviation and charter business are expected to return to pre-pandemic levels only over the next two financial years, which adds further strain on revenue projections.
Impact on Airlines and Passengers
The fuel levy increase is likely to have a significant impact on the aviation sector, primarily increasing operational costs for airlines, charter services, and other aviation-related businesses. While it is unlikely that the levy will directly trigger a surge in ticket prices, the rising costs associated with fuel, airport tariffs, and other operating expenses will likely lead to higher prices for consumers in the long term.
Airlines and charter companies have expressed concern about the cumulative effect of these increases. For businesses that are still recovering from the pandemic, any additional costs—particularly in an environment of slow growth—pose a challenge. As one of the largest ongoing expenses for airlines, the fuel levy will continue to be a major factor in their bottom lines.
Back in May 2023, the Democratic Alliance (DA) raised concerns about the impact of the fuel levy increase, claiming that the lack of industry consultation violated the principles of public participation under the Levies Act.
This was naturally overlooked and the 2024 increase went ahead. With the 2025 increase now on the horizon, these concerns are likely to intensify, especially as the cost of air travel continues to rise across the board. While industry insiders are not predicting an immediate spike in ticket prices, the overall effect of rising business costs—coupled with the already-high inflationary environment—could make travel more expensive for passengers in the near future.
But, What’s Next?
The fuel levy increase set for 2025 is a crucial part of South Africa’s effort to align with international aviation regulations while managing the financial health of its aviation sector. However, the ongoing nature of these increases means that airlines, charter services, and passengers must continue to adapt to an evolving cost structure.
Looking ahead, industry players will be watching closely as the third and final phase of the fuel levy increase is set to take effect in April 2026, when the levy will rise to 23.91 cents per litre. The final phase will bring the cumulative effect of all three increases into sharper focus, further highlighting the challenges facing the sector.
For passengers, while it is still unclear how much of the levy increase will be passed on in ticket prices, the broader trend suggests that air travel will become more expensive. With other aviation-related costs—such as airport tariffs and fuel—also on the rise, the cost of flying will continue to put pressure on both businesses and consumers in the coming years.
