New SA airline to fly to cities neglected by majors

23 August 2015 - 02:00 By ANDISWA MAQUTU

With the launch of new carrier Fly Blue Crane, South African travellers can look forward to more flights to choose from when flying to Bloemfontein, Kimberley and Nelspruit. The airline is headed by former South African Airways (SAA) CEO Siza Mzimela and ex-SAA employees Theunis Potgieter and Jerome Simelane.story_article_left1Mzimela says there is a gap in the market for a carrier operating outside the "traditional" Johannesburg-Cape Town-Durban routes. Fly Blue Crane will begin by offering flights on "secondary routes", targeting mainly business travellers.The airline, which applied for an air services licence last year, will launch next month as a hybrid offering the best of a low-cost airline and mainline carrier, Mzimela says.The airline will launch with five flights daily on the Johannesburg -Bloemfontein route, three between Johannesburg and Kimberley and two flights for the Johannesburg-Nelspruit route. "For business people, frequency is crucial."Mzimela says Fly Blue Crane is intended to be a regional carrier and has both a domestic and international licence. It is looking to launch a Cape Town-Windhoek route."There is huge demand for services into the rest of Southern Africa ... there is an opportunity to open new routes in new markets that are not being exploited," says Mzimela.Cape Town-Luanda and Cape Town-Harare are routes that present an opportunity as no local airlines are flying these, she says. "We are looking for these types of routes."Air ticket prices have risen by 20% over the past three years, according to Comair, which operates the British Airways franchise locally and the kulula.com low-cost carrier, while FlySafair puts the rise at 40%.story_article_right2However, new entrants to the market have driven prices down by nearly 39% on some routes, according to research by booking site Travelstart. Operating costs, often dollar denominated, remain a concern for airlines in light of a volatile currency.Fly Blue Crane is the third airline to launch in the country over the past 12 months.Low-cost carrier FlySafair launched in October last year, targeting the leisure market. The airline has flights between Johannesburg and George, East London, Durban and Port Elizabeth, as well as flights along the coastal routes. FlySafair has struggled to attract business travellers due to a limited network but is looking to add new routes to its offering.Low-cost carrier Skywise, a subsidiary of Pak Africa, launched with flights to Cape Town in February. The low-cost airline was headed by the founder of bankrupt airline 1time, but Pak Africa, an aviation investment company, bought the airline's air service licence agreement last year with the intention of launching regional flights.Pak Africa is also in the process of acquiring the brand and the JSE-listed shell company of 1time Airlines, which it has been eyeing for the past five years. The company intends to purchase aviation-related companies in the region to build up regional operations.Transport economist and aviation expert Joachim Vermooten says there is room for new competitors, particularly on smaller routes. However, Fly Blue Crane would have to come in with competitive ticket prices to compete with SA Express and SA Airlink, which are linked to SAA's Voyager programme."There is the stickiness of getting customers to switch from an existing airline to a new one because of loyalty schemes. They will have to come in with a large enough discount to cut through that effect," he says.story_article_left3Earlier this year, Skywise called for state-owned airline SAA to be removed from the domestic market, saying it had to compete with SAA prices, which could be set without regard for costs due to the blank cheque it received from the state. Comair unsuccessfully challenged the guarantees given to SAA, saying they were a delaying device to afford SAA funding from banks that would be paid by the government.Mzimela says she is not focusing on the state-owned airline. "Our philosophy is to focus on us. Our competitors are thriving despite that."Fly Blue Crane will employ more than 70 permanent staff - with a call centre and maintenance outsourced.The lower oil price is also beneficial to the airline but Mzimela said Fly Blue Crane had never planned for a lower oil price to remain sustainable."When you know what you are doing, it is a good business to be in," she says."We have the experience and skill to make it a success."..

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