Abstract
South Africa’s domestic airline market experienced significant structural shifts between 2014 and 2023, driven by airline entries, exits, and the COVID-19 shock, which reshaped competition and airfare dynamics. Despite growing literature on airline pricing, the South African case remains underexplored, particularly regarding the interplay of market structure, competitive intensity, and exogenous shocks on price outcomes. This study investigates how competition and market structure influence domestic airfares, using a qualitative framework supported by descriptive quantitative analysis of fares, capacity, and market shares. The study finds that competition exerts downward pressure on airfares, particularly following an entry in the market, although these effects tend to be short-lived, as subsequent market exits and capacity reductions often lead to renewed fare increases. The findings also indicate that while fluctuations in fuel prices contribute to fare movements, they do not fully explain the observed pricing outcomes. The study concludes that South Africa’s airline industry remains only partially contestable, with persistent structural constraints continuing to undermine sustained competition and long-term market stability.