South African air routes will be a lot busier if all the recent potential entries to the LCC market succeed in launching operations.
After its competitors blocked the start of operations a year ago, FlySafair takes to the skies on October 16 with services between Cape Town and Johannesburg, adding routes from the Mother City to Port Elizabeth and George shortly thereafter. The airline’s pricing model is based on a base rate for a seat and two pieces of carry-on luggage weighing not more than 7kg. Meals, checked luggage and pre-booked seats cost more, representing considerable savings for the passenger.
Dave Andrew, FlySafair CEO, has said that the new airline’s announced fares are not simply opening ploys and that the low-cost model applied is sustainable. The average fare across all seats in aggregate exceeds the cost of operating the flight, he says.
Skywise, another new venture planning to fly between Johannesburg and Cape Town, has yet to take off, although CEO, Rodney James told Tourism Update, last month that they were in the midst of negotiations regarding the airline’s structure. Its Air Service Licence (ASL), cancelled by the Department of Transport due to the delay, was reinstated after a court order.
Fly Blue Crane, a subsidiary of Blue Crane Aviation and headed by former SAA and SA Express CEO, Siza Mzimela, also announced its intention to fly between Johannesburg and Cape Town in May this year.
Regionally, fastjet, with its ultra-cheap fares is certainly making its presence felt. Now flying from Dar es Salaam to Johannesburg, Lusaka, Harare and Entebbe, and in the process of establishing a Kenyan operation, it has been named the cheapest LCC in Africa and fifth-cheapest worldwide by the flight comparison website, WhichAirline.com.
A second recent LCC entrant is Flyafrica.com, which commenced services between Victoria Falls, Zimbabwe and Johannesburg on August 1, and will begin services between Harare and Johannesburg on November 1.
As these new airlines come into the picture, the travel trade and travelling public can expect more competitive domestic and regional airfares. Taking into account the price-sensitivity of the South African market, both LCCs and traditional carriers could well react with reduced fares of their own. But will it be just a matter of time until sustainability rears its head?
SAA-affiliated Mango is one of the stalwarts on the South African LCC scene. Head of Communications, Hein Kaiser, says the introduction of competitive domestic airlines does have a positive effect for consumers, but for a limited period. Mango will continue to offer a weekly ticket sale on Tuesdays, but the possibility of an all-out price war is unlikely. With the negative growth in passenger numbers in recent years, additional capacity could affect the delicate equilibrium between supply and demand.
Comair CEO, which also operates LCC kulula.com, Erik Venter, recently told Business Day that FlySafair’s launch did not indicate significant changes in the airline’s ticket prices, other than ensuring some competitive rates for a few weeks. He said at a profit per passenger of R51, the airline could not sustain lower fares.