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: Challenges Facing The Aviation Industry

The fundamental problem in the African aviation industry is fragmentation and that protectionism of national airlines will not go away soon, according to Erik Venter, CEO of Comair and chair of the Airlines Association of Southern Africa (Aasa).

This fragmentation in the African industry makes it difficult to achieve the necessary scale to compete with international airlines from outside the continent, Venter explained during a panel discussion by airline CEOs at Aasa’s annual general assembly.

As for tourism, Venter said the product that must be marketed is the destination. Most people do not just fly to fly. They do so to go to a destination for a reason. This is why Venter would like to see more co-ordination in the way tourism, and especially the marketing thereof, is approached.

“If something is not happening, do something. Don’t just say it is out of your sphere of responsibility,” said Venter.

For Irfan Pardesi, CEO of Skywise, the latest low cost airline to enter the SA market, the airline is looking for unique opportunities in SA. He sees the student tourism market as one such opportunity for potential growth.

In his view it would be a great idea for the airlines in SA to work together to offer travellers one pass to use on them all so that they would then end up visiting more destinations in the country and accordingly boost tourism as well.

He also said the new unlimited travel pass that Skywise introduced on the Johannesburg-Cape Town route, is working well.

Nico Bezuidenhout, CEO of Mango, said it is all about meeting the requirements of consumers. He pointed out that the airline industry is one of the few where year after year the unit cost is reduced. He also pointed out that a ticket between Johannesburg and Cape Town is cheaper today than in the year 2000.

“One cannot do that without innovation and therefore the airline industry is a breeding ground for innovation,” said Bezuidenhout.

“We must operate from a position of excellence and best practice.”

For Inati Ntshanga, CEO of SA Express and newly elected chair of Aasa, the important question currently in the SA airline industry is whether it will become cheap but not sustainable.

“It is about selling the right ticket at the right price to the right passenger. A taxi from OR Tambo airport to Johannesburg is already more than R500,” he said.

In his view there is definitely room for consolidation in the SA industry and to him the biggest challenge for the industry is a non-alignment between different government departments in matters relating to the industry.

Sylvain Bosc, chief commercial officer of SAA, said airlines are often blamed for a drop in tourism. He pointed out, however, that SA is a long haul destination, far from the biggest source markets, and the airline industry is very competitive.

He said currently some international airlines are reducing their capacity to SA, because the market is oversupplied with seats at the moment in terms of demand.

“Prices in the market are not aligned with the cost of production. How is this possible?” he asked.

“It is because some of the carriers are not operating in the same playing field as us.”

Ben Dahwa, CEO of Air Botswana, also said Africa’s aviation industry needs to be innovative and cannot just continue to think in the same old ways. In his view the industry cannot afford the luxury of not forming partnerships.

“It is about finding each other. Airlines form just a small part of the big picture which brings tourists to our sub-region of Africa. We must work together by using follow-up forums,” he suggested.

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.

SOUTH AFRICA: Skywise’s Commences Johannesburg to Cape Town Flights

Skywise celebrated the launch of its first operations at Johannesburg Airport, with the addition of twice-daily flights to Cape Town
Skywise, the South African carrier that was founded in 2012 before suffering from numerous licencing issues, finally commenced first operations on 5 March, adding flights from Johannesburg (JNB) to Cape Town (CPT).

Even though this route is extensively competed, with flights offered by South African Airways (126 times weekly), Comair (122), Mango Airlines (43) and FlySafair (26), Skywise will operate twice-daily flights using its 737-300s.