SOUTH AFRICA: SAA, Mango And SA Express To Merge

It is unclear what a merger between the three state-owned airlines SAA, Mango and SA Express would achieve that cannot be achieved by each airline individually, Erik Venter, CEO of Comair said.

This was in reaction to a parliamentary response by Public Enterprises Minister Lynne Brown. Brown said it will cost government R12.1m to make use of the services of Bain and Company, the Boston-based consultancy firm appointed to manage such a merger.

“Mango is already a 100% subsidiary of SAA and SAA ensures that its flights do not overlap with those of SA Express. So I do not see any structural change to the network or capacity arising from the merger,” said Venter.

“The airlines already make common use of some of SAA’s back office systems and airport staff, for instance, so I do not see any meaningful saving in overheads arising specifically from a merger.”

At the same time, a merger might consolidate three boards of directors into one and might concentrate control under one CEO, added Venter.

In her parliamentary response Brown said the scope of the work entails the development of an “optimal corporate structure to re-align the state-owned airlines” and that the consultancy will take cognisance of industry best practices.

In October 2016 at a meeting of the Airlines Association of Southern Africa in Namibia, Brown said airlines worldwide were compelled to restructure their operations to address inefficiencies and remain relevant to the markets they serve.

She emphasised though that the “strategic intent” of government is to maintain control and oversight of the state airlines. She said a holding company for the three separate airlines could be created, or they could be merged into one entity. Another possibility would be to sell a 25% stake in the newly formed holding company to a strategic partner.

There have been several calls from business and opposition parties for the national carrier to be privatised.

SAA has in the past two financial years made a combined financial loss of over R7bn, while Mango recorded a loss of R36.9m in the financial year to the end of February 2016.

Both SAA and SA Express are surviving on state debt guarantees at a time when the government is trying to rein in spending and raise revenue amid slowing economic growth.

MALAYSIA: AirAsia has been named the World’s Leading Low-Cost Airline

AirAsia has been named the World’s Leading Low-Cost Airline for the fourth year in a row and its maiden title as the World's Leading Inflight Service at the 23rd World Travel Awards (WTA) Grand Final held in Male, Maldives.

Asia's largest low-cost carrier beat contenders from five continents to secure the award, including Ryanair, easyJet, Jetstar Airways, Southwest Airlines, JetBlue Airways, Norwegian, Kulula, Mango, fastjet, flydubai, Air Arabia, flynas and West Air. "What a thrill to win World’s Leading Low-Cost Airline for the fourth straight year.

It's a great honour to round out what has been a great year for AirAsia, not just financially but in terms of recognition from the industry," Group Chief Executive Officer, Tan Sri Tony Fernandes said today. AirAsia also won the World's Leading Inflight Service title for the first time ever, beating full-service carriers Etihad Airways, Japan Airlines, Singapore Airlines, Thai Airways, Qantas Airways, Lufthansa, American Airlines and Air Canada.

The win builds on AirAsia's success earlier this year when it secured Asia's Leading Inflight Service award from WTA for the first time. "I’m also super proud of our first World’s Leading Inflight Service award. I've always said we have amazing crew and amazing inflight products, and we've proven it by beating not one, not two, not three, but eight full-service carriers for the prize," he said in a statement.

He said there are more to come for AirAsia as the airline is always working on more innovations, and not just for inflight. "Right now, we are exploring ways to make the airport experience better. One thing we're looking at is fast-tracking guests who share their travel profile with immigration authorities.

We expect to run the trial at selected airports in Asean in the not-too-distant future, so keep an eye out for it," he said. The WTA serves to acknowledge, reward and celebrate excellence across all sectors of the travel and tourism industry, as chosen by thousands of travel professionals and high-end tourism consumers.

Airlines are judged on customer satisfaction and service quality, overall business performance, product innovation, staff relations and development, corporate social responsibility and contribution to local community, commitment to sustainable policies and fulfillment of long-term corporate vision. AirAsia is Asia's leading low-cost carrier, with an extensive network of more than 120 destinations in Asia, Australia and New Zealand, the Middle East and Africa.

It is also the only airline to fly direct to all 10 Asean countries, including some 60 unique routes in the region. AirAsia was also named World's Best Low-Cost Airline for the eighth year in a row at the 2016 Skytrax World Airline Awards in July. --Bernama

Fastjet Attracts CEO From Mango

Fastjet has announced Nico Bezuidenhout, whoo has just resigned from Mango, has been appointed as Chief Executive Officer (CEO) of the Company. London-listed Fastjet and Mango, a unit of South African Airways (SAA), are part of a wave of low-priced airlines expanding operations in Africa as they seek to capture middle-income travellers who are exhausted of unsafe road journeys but cannot afford major global carriers.

Nico Bezuidenhout, who joins Fastjet on August 1, will be filling a position that was vacant for almost three months after the previous CEO resigned due to pressure from the company’s second-largest shareholder.

During his tenure, Nico grew the airline’s market share to 25 per cent of the South African domestic air travel market and the fleet to ten Boeing 737-800 aircraft. The pan-African airline warned in March that its full-year earnings would miss expectations with low demand and cash flow. Bezuidenhout joins FastJet with high expectations as the company has ambitions to become the first low-priced pan-African airline.

“This experience, together with his detailed knowledge of the markets in which fastjet operates, will be invaluable to the Company as it seeks to capture the growth opportunities in the region”. “I am very pleased to be doing fastjet at this stage in its development”, he said. Bezuidenhout adding that while conditions were challenging, he was confident he could build on fastjet’s current operational base.

Fastjet, which operates mainly out of Tanzania at the moment, made an operating loss of $37.9-million a year ago, although this was an improvement over its loss of $43.9-million in 2014. The stock has dropped 62 percent this year. Fastjet launched flights between South Africa and Zimbabwe earlier this year. Legacy operations Fly 540 Ghana and Fly 540 Angola were shut down and route network rationalisation was begun.

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.