SOUTH AFRICA: Fly Blue Crane To Restructure

Low-cost airline Fly Blue Crane is evaluating its routes as part of a restructuring process following the company’s application for business rescue last year, said business rescue practitioner, Etienne Naude on Sunday.

Fly Blue Crane became the latest South African airline to hit turbulence when it filed for a voluntary application for business rescue late last year to facilitate the rehabilitation of the company. By opting for business rescue, the company was taking a step many of its peers around the world had taken in order to re-engineer and strengthen their businesses, the company said last November.

The move came shortly after Fly Blue Crane launched flights to Mthatha, Eastern Cape. Naude said as a result of the business rescue application the company would operate under the supervision of a business rescue practitioner, as the restructuring of the company takes place.

He said Fly Blue Crane, which has flights to Cape Town, Kimberley, Mthatha and Bloemfontein, was evaluating its routes as part of its re-engineering programme, “including the fine-tuning of its schedules to some destinations during low seasons - such as the end-of-year break when business customers in some markets are away on holiday.

“This occasionally means pulling back on the number of flights to such destinations during these periods, with normal service resuming as soon as the core travelling base is back,” said Naude. The company started flying in September 2015, entering a market that had seen the demise of other low-cost airlines such as Nationwide Arlines, 1Time and Velvet Sky, among others.

“I am very confident about the airline’s future, and have every reason to believe that it is a matter of time before Fly Blue Crane overcomes its challenges. Yes, there is lots of hard work ahead, but all is well and the airline is operating as usual and servicing its routes. The management and staff are here and working very hard, and looking very motivated and determined,” he said.

Naude said he had met all of Fly Blue Crane’s major business partners, and they had pledged their support. “It is for these reasons that I’ve no doubt that the business rescue process will provide the company with the opportunity it needs to restructure its affairs, enter into and conclude its discussions with potential key strategic partners, and negotiate workable payment arrangements with creditors,” he said.

Naude said, while the business rescue process was not yet as widely practised in South Africa as it was globally, it was on the increase and allowed for the restructuring of companies to the benefit of all stakeholders, including creditors and employees. “As unfortunate as it is, it is normal for companies to find themselves in distress due to any number of circumstances which can be overcome given time, support and diligent management.

In that event, the business rescue process provides companies with the requisite space to re-organise and restructure their operations, while saving jobs and continuing to trade normally,” he said.

SOUTH AFRICA: Fly Blue Crane To The Eastern Cape

Fly Blue Crane will initially offer only two flights a day between Mthatha and Johannesburg. Routes will be added to connect the former Transkei capital to other cities.

Fly Blue Crane airport operations head Stompie Tshesane said that, unlike other low-cost operators, the airline will provide free meals and beverages.

"We will be operating an Andrea 145, a 50-seat jet," she said.

SOUTH AFRICA: First Airline Founded By A Black Woman, Fly Blue Crane

2015, Air Zimbabwe and Ethiopian Airlines made major strides towards the inclusion of women in the aviation world with the launch of their all-women flight crews. Women continue to be at the forefront of African-based air travel with the establishment of South Africa’s Fly Blue Crane, the first airline to be founded by a black woman.

Fly Blue Crane, which has been operating domestically within South Africa since its inception last September, is conducting international flights.

The airline is under the leadership of CEO, Sizakele Mzimela, who’s also the first black executive vice president of South African Airways and the first woman to be selected to the Board of the International Air Transport Association.

Mzimela has previously been vocal about her desire to expand the airline outside of South African borders, with specific mention of Botswana, Namibia, Zimbabwe and the DRC.

The airline exec, who has over 20 years of experience in the industry, shared some words of wisdom for female aviators in an interview with Runway Girl Network:

“You have to accept up front that your road will be more difficult than the pale white male sitting next to you,” she mentions. “It’s your job to say ‘nothing will stop me. I’m going to make it.’”

MOZAMBIQUE: Aviation Industry To Improve

Fly Blue Crane recently announced plans to service Mozambique and is currently awaiting its foreign operator permits. The airline has been granted 14 frequencies a week between Johannesburg and Maputo and is expected to announce a launch date shortly.

“This is very good news for hotels and operators/travel agents who book Mozambique, provided the rates are good,” said Karin Sieberhagen from Serena Hotels.

Natalie Tenzer-Silva from Dana Tours said a low-cost carrier was needed to fly into Maputo. “We would welcome the arrival of any carrier that would offer competitive rates to boost the tourism market to Mozambique.”

However, Fly Blue Crane CEO, Siza Mzimela, said the Maputo route would require careful planning because the airline had been restricted to 400 seats a week on the route.

Restrictions in air access and high-priced flights have led to a decline in tourism to Mozambique, but tourism suppliers hope that the recent announcement by Fly Blue Crane will provide cheaper flight options to the destination.

Another factor cited by members of the trade as one of the things holding back tourism growth is protectionism.

South African airline operators have faced cabotage enforcement in Mozambique that has led to a decline in tourism business in the destination. “Any foreign airline or foreign carrier can only fly into one destination,” explained Brian Holmes, MD of Solenta Aviation Mozambique. The cabotage restriction prevents any commercial operators from flying to multiple destinations, for example to Vilanculos via Maputo.

“One of the effects from the enforcement of cabotage that we’ve seen, is that there’s a decline in business overall from a tourism perspective because it does make Mozambique an expensive destination,” said Holmes.

Federal Airlines used to operate scheduled flights from both Johannesburg and Kruger to Vilanculos. “We stopped that about three-and-a-half years ago and now our flights to Mozambique are on a private charter basis, which we provide as and when required,” said Nik Lloyd-Roberts, the airline’s Commercial Manager.

He said an increase in competition also contributed to the termination of scheduled flights.

“The route became unprofitable for us.” On future plans to service Mozambique, he said: “Unless they lift their foot off the cabotage there are no immediate plans from our side.”

Holmes said: “We’re not asking for anything more than what South African operators would be up in arms about if we did the same in South Africa.”

While local South African charters do have the disadvantage of cabotage, they do have some advantages. Holmes said South African operators did not pay the 14% VAT on charter flights nor a 10% withholding tax that Mozambique operators had to pay. Local operators in Mozambique are at a 24% disadvantage on local charters compared with South African operators, who come out cheaper.

Tenzer-Silva added that another challenge was the international ban on Mozambique-registered aircraft.

“This means that international travellers from certain European countries are not permitted to fly on any carrier registered in Mozambique because their insurance will not cover them. SA Airlink, being South African registered, offers an alternative to these travellers, however they do not service the domestic routes in Mozambique.”

According to Tenzer-Silva, Mozambique needs to be marketed as a stand-alone destination.

“Affordable and reliable air travel is a vital component, otherwise we are pricing ourselves out of the market.”

Currently Airlink operates flights from Johannesburg to both Pemba and Vilanculos on Mondays, Tuesdays, Wednesdays, Fridays and Saturdays.

Airlink also operates flights from Johannesburg to Beira, Nampula and Tete and from Durban to Maputo.

SAA offers flights to from Durban and Johannesburg to Maputo.

SOUTH AFRICA: Fly Blue Crane Alive On Travelport

Travelport has partnered with Fly Blue Crane to offer its merchandising solution, Travelport Rich Content and Branding.

The airline was launched in September 2015 and offers travel opportunities to various business and leisure destinations within the Southern African region, including Johannesburg, Cape Town, Bloemfontein and Kimberley.

The new multi-year global agreement with Travelport, gives the 68,000 Travelport-connected travel agency customers access to Fly Blue Crane’s content via Travelport’s Travel Commerce Platform.

Fly Blue Crane is now the latest carrier to go live on Travelport’s Rich Content and Branding solution which allows airlines to present their complete offerings to travel agents including graphical images and descriptions.

Approximately 160 airlines are now live with Travelport Rich Content and Branding. Building on this success, Travelport has recently also added the capability for airlines to make tailored or personalised offers to both individual travel agencies and/or Travel Management Company services.

SOUTH AFRICA: FlySafair, Skywise And Fly Blue Crane Face Challenging Future

On 1 September, Fly Blue Crane became the third new carrier in the last 12 months to launch service in the South African domestic market. The ERJ 145 operator joins FlySafair and Skywise in attempting to break the virtual duopoly in the domestic market. South African Airways and its low-cost subsidiary Mango, along with Comair’s British Airways franchise flights and its own low-cost kulula.com operation currently dominate the domestic scene.

With a population of around 55 million people (around 10% fewer than Italy) and covering an area about three times the size of Japan, South Africa’s airports only handled 35.2 million passengers in 2014, according to ACSA (Airports Company of South Africa). The country’s three main international airports in Johannesburg, Cape Town and Durban account for over 90% of that traffic. After double-digit growth between 2005 and 2007, passenger numbers fell in 2008, 2009, 2012 and 2013, but grew in 2010, 2011 and 2014. Data from ACSA reveals that in each of the first six months of 2015 total passengers across the country’s three main airports has grown by 3.9%, as a result of which demand has now grown in 11 of the last 12 months, the exception being September 2014.

Domestic market up 11%, UAE capacity up 25%
Analysis of OAG schedule data for September 2015 and September 2014 reveals that seat capacity is up just over 8%. Domestic routes account for around 70% of departing seat capacity across the country’s airports, and the total number of domestic seats is up almost 11%, partly due to the emergence of new carriers FlySafair (which launched in October 2014) and Skywise (which launched on 5 March 2015). Another new domestic start-up, Fly Blue Crane, began operations at the beginning of September, but its schedule data is not yet showing up in OAG figures. All of these new carriers will be mindful of what happened to 1time and Velvet Sky among others.



Among the leading country markets, the UAE is now the leading international destination, and has seen seat capacity growth of 25% in the last 12 months, partly due to Emirates adding a fourth daily flight from Dubai to Johannesburg and South African Airways launching daily flights at the end of March 2015 from Johannesburg to Abu Dhabi. The route is already served by Etihad Airways with whom SAA is operating a codeshare on this new service.

Zimbabwe and Namibia have also seen capacity growth of over 20% in the last 12 months, while the leading European markets of UK and Germany have each grown by less than 3%. Two other leading long-haul markets, Australia and the US, have seen virtually no change in seat capacity.

SOUTH AFRICA: Fly Blue Crane 3rd Airline To Launch Flights In Domestic Market

On 1 September, Fly Blue Crane became the third new carrier in the last 12 months to launch service in the South African domestic market. The ERJ 145 operator joins FlySafair and Skywise in attempting to break the virtual duopoly in the domestic market. South African Airways and its low-cost subsidiary Mango, along with Comair’s British Airways franchise flights and its own low-cost kulula.com operation currently dominate the domestic scene.

With a population of around 55 million people (around 10% fewer than Italy) and covering an area about three times the size of Japan, South Africa’s airports only handled 35.2 million passengers in 2014, according to ACSA (Airports Company of South Africa). The country’s three main international airports in Johannesburg, Cape Town and Durban account for over 90% of that traffic. After double-digit growth between 2005 and 2007, passenger numbers fell in 2008, 2009, 2012 and 2013, but grew in 2010, 2011 and 2014. Data from ACSA reveals that in each of the first six months of 2015 total passengers across the country’s three main airports has grown by 3.9%, as a result of which demand has now grown in 11 of the last 12 months, the exception being September 2014.

Domestic market up 11%, UAE capacity up 25%
Analysis of OAG schedule data for September 2015 and September 2014 reveals that seat capacity is up just over 8%. Domestic routes account for around 70% of departing seat capacity across the country’s airports, and the total number of domestic seats is up almost 11%, partly due to the emergence of new carriers FlySafair (which launched in October 2014) and Skywise (which launched on 5 March 2015). Another new domestic start-up, Fly Blue Crane, began operations at the beginning of September, but its schedule data is not yet showing up in OAG figures. All of these new carriers will be mindful of what happened to 1time and Velvet Sky among others.

Among the leading country markets, the UAE is now the leading international destination, and has seen seat capacity growth of 25% in the last 12 months, partly due to Emirates adding a fourth daily flight from Dubai to Johannesburg and South African Airways launching daily flights at the end of March 2015 from Johannesburg to Abu Dhabi. The route is already served by Etihad Airways with whom SAA is operating a codeshare on this new service.

Zimbabwe and Namibia have also seen capacity growth of over 20% in the last 12 months, while the leading European markets of UK and Germany have each grown by less than 3%. Two other leading long-haul markets, Australia and the US, have seen virtually no change in seat capacity.