Ground transport operators and airlines are bracing for rising costs and potential knock-on effects as global oil prices surge amid the conflict in the Middle East.
Analysts warn that disruptions to supply routes, particularly the Strait of Hormuz, the narrow waterway through which roughly 20% of the world’s oil supply flows, could push prices higher.
“Fluctuating oil prices are nothing new. Along with exchange rate fluctuations, they’re a constant source of uncertainty for ground transport operators when it comes to estimating fuel costs,” Onne Vegter, Chair of the SATSA Transport Committee, told Tourism Update.
He explained that fuel prices are naturally adjusted monthly and big unexpected jumps will quickly reflect in adjusted pricing by certain operators.
“However, many tourist transport operators are already committed to their contracted or published rates for 2026 and our industry partners and agents abroad have already packaged and advertised tours based on these rates. This means many operators will have to absorb these fluctuations themselves and cannot easily pass these increases on to their customers.”
If the conflict persists, the industry may face prolonged cost pressures.
“If the currency also weakens in the coming months, that will multiply the effect on air and road transport costs. Nobody has a crystal ball so we always plan for the worst but hope for the best,” Vegter added.
Contractual obligations
Most operators try their utmost to absorb rising costs and many are contractually bound to agreed rates.
“When absorbing these increases isn’t feasible or financially sustainable, the most common approach we’ve seen is introducing a fuel levy or surcharge, which is typically added to the standard rates. Of course, customers and agents often dislike such a fuel surcharge and it complicates accounting and quoting processes. So operators usually try to avoid this and only use a fuel surcharge as a last resort,” said Vegter.
Contract terms and conditions play a major role. “They usually determine whether an operator can introduce a fuel levy or adjust rates in response to sharp price increases. In most cases, the quoted rates are honoured for already sold packages, forcing the operator to absorb the additional fuel costs.”
He believes some operators will start adding a temporary fuel levy to their 2026-2027 rates.
“In a recent poll among wheels operators, 54% of respondents indicated that their annual rates are already fixed and they will have to absorb these fuel price hikes themselves. Roughly 46% indicated they will probably have to implement a fuel levy or adjust their rates to pass rising costs on to customers.”
Knock-on effect
Rising fuel costs also put inflationary pressure on the entire tourism value chain with the biggest direct impact on inbound tourism likely to be on airfares rather than ground handling costs.
“The Middle East conflict impacts airlift directly through flight cancellations and rising flight costs. Local and regional airfares are also immediately impacted by rising fuel costs and will adjust ticket prices accordingly. When combining this with the impact on ground handling costs and retail pricing, we can expect tour packages to become noticeably more expensive if these higher prices are sustained,” said Vegter.
Steve Maidment, General Manager: Operations at Drifters, a division of Tourvest Destination Management, said its overland and safari tours remain resilient to the current spike.
“While diesel is a significant cost on our tours, historically, we have been able to absorb fluctuations during the course of the year as long as they remain reasonably moderate and of limited duration. We have seen diesel prices considerably higher than current prices so we are not charting new territory yet. But, of course, there is a limit and we will continue to monitor the situation,” said Maidment.
Operational changes, such as route adjustments or shorter itineraries, are also not anticipated. “We haven’t reached that level yet and don’t anticipate having to make changes under the current circumstances,” Maidment confirmed.
Airlines respond with surcharges
South African domestic, regional and international airlines are already adjusting fares and adding fuel surcharges as rising oil prices linked to conflict in the Middle East push up operating costs, as reported by Tourism Update’s sister publication Travel News.
FlySafair was the first domestic airline to announce the introduction of a temporary fuel surcharge last week.
Other carriers, including SAA, Airlink and LIFT, have since confirmed fare adjustments in response to the rising cost of jet fuel while CemAir will continue to monitor the situation closely over the coming days.
