National air carrier South African Airways (SAA), which EgyptAir will join at the end of the year to be the only African airways in the Star Alliance network, said on Wednesday that there will be "no astronomical increase in fares", as its costs soared.

CEO Khaya Ngqula stated that the airline was operating in "tough times", and could not pass the cost of surging oil prices and the rand/dollar exchange rate on to clients, and had to do a "balancing act".

"We don't want to discourage people from flying," he told reporters in Johannesburg.

He detailed that SAA had budgeted an oil price of $65/bl and an exchange rate of R7,25/$ for its current financial year, while oil was on Wednesday trading at $101,12/bl, and the exchange rate R7,80/$. "It has a major impact on what we do," Ngqula said.

Meanwhile, Star Alliance - which has 19 member airlines - CEO Jaan Albrecht said that high fuel prices were an industrywide problem. "There is no doubt about it," he stated, on a visit to South Africa.

Albrecht said that the airline industry had made "huge" efforts, working with manufacturers to ensure efficient use of fuel, allowing it to implement significant cost savings. The global industry had also gone though a major restructuring to cope with the current environment, he noted.

While SAA would not pass significant cost increases onto its passengers, Albrecht said that the industry in general had been able to do so - to a certain degree. He commented that it had passed on these costs in a "transparent way".

Another threat to the airline industry was slowing economic conditions in countries like the US, but it had also found ways to mitigate this. "There is some flexibility to redeploy aircraft to high-growth areas," he said. These included countries like China and India, but even Africa offered attractive growth prospects.

Star Alliance officials were on an official visit to South Africa to work with SAA to strengthen the airline's and the alliance's presence on the continent. Both Ngqula and Albrecht said that SAA and EgyptAir would be able to cooperate well together to enhance connectivity in Africa.

"We will look at the synergies and meet each other halfway," the SAA boss stated. EgyptAir focused on North Africa, while the South African carrier had a stronger focus on sub-Saharan Africa.

Ngqula said that the biggest challenges of expanding an airline on the continent were promoting open skies among the different countries, and negotiating with the different governments. He also pointed out that many of its countries were in different stages of development.