Thursday, 29 August 2013

Safair, a well established leasing and cargo entity, was awarded a Domestic Air Services licence this week and has announced plans to commence flights between Johannesburg and Cape Town with B737-400 aircraft before the end of 2013. Comair, now starting to act like a national carrier, has objected to the award and is taking court action.

Monday, 26 August 2013

Where are these new airlines?

In the aftermath of the failures of Velvet Sky Aviation and 1Time Airline during 2012, there has been much talk and publicity about the new airlines that would rise from the ashes. I am quite fascinated how rumours can very quickly become firm predictions and even launch announcements, but in reality, the road to the first flight of a new airline is a long and arduous one, and in South Africa it can take up to 2 years to complete all the necessary formalities. Of course, on the finance side, millions have to be raised simply to fund working capital.

Way back in January 2013, there were reports of more than one party in talks to resurrect 1Time, and since then, different players have entered the fray, the latest being Pak Africa. It is reported that the Aurora/Excalibur team that was involved with Velvet Sky is active in this new project.

 “In a year or two, 1time will be the biggest brand in Africa,” Tabassum Qadir, the Managing Director of Pak Africa told CNBC Africa on Thursday. 

The previous interested party, fastjet, has other issues to contend with. African Aviation Tribune reports that 
"Struggling LCC fastjet (FN), is set to become the second major Tanzanian carrier to embark on a redundancy drive following reports that it is in consultations with its employees regarding pending staff cuts aimed at trimming its head-count by 12%. "

fastjet has been  romancing all over Africa in search of a golden key to unlock the aviation riches of Africa, but has so far failed to establish a serious foothold, mainly, it is believed, due to its high operational costs and lack of local knowledge.

The other offshoot of the 1Time legacy, Skywise, has shown more promise, although it has also been tempted to over-promise without being able to re-introduce low-cost air travel into the South African domestic market. It has successfully obtained its Domestic Air Services Licence and now has to convince the CAA to issue its AOC. Latest statements indicate that staff are all in place, but there is some debate over whether the necessary funding is in place.

There are two other players who remain relatively silent on their intentions. have a website with a countdown timer, that tends to reset every now and again, and they dub themselves as "Africa's Low Cost Carrier" - sounding a little like fastjet. They are believed to be backed by entities in New Zealand, and some ex-SAA executives are mentioned in discussions.

And then there is Safair, traditionally a freight and charter outfit, who are toying with the possibility of moving into scheduled service, and who have been recruiting flight deck crew. It is possible that some mix-and-match could still happen amongst the four players mentioned.

The losers in this waiting game are the consumers, and industry service providers, but the winners are Comair and Mango. With air fares now up to as much as double those of 2 years ago, the survivors are reaping good margin and growing fast. In its last statement, Comair was predicting a 20% increase in earnings, and Mango is almost doubling its fleet and adding new destinations.

There is space in the market and the December peak is fast approaching. It is probably now or never.