CAPE TOWN — Safair’s new low-cost airline FlySafair, which took to the sky with inaugural flights between Johannesburg and Cape Town on Thursday, might engender a lowering of domestic airfares generally, a Department of Transport official said on Thursday.
Next month’s launch of Fly Blue Crane as a regional airline could also have a similar effect, introducing much-needed competition to the airline industry.
FlySafair is flying four return flights daily between Johannesburg and Cape Town at a highly competitive single fare of R499 inclusive of taxes. Over the next month it will launch flights to Port Elizabeth and George as well. FlySafair charges for extras such as catering, check-in luggage and preferential seats.
The airline is operating two 737-400 aircraft (with backup aircraft on standby) in a combination of ownership and leasing.
Safair CEO Dave Andrew said reservations on the Cape Town to Johannesburg flights were slow to pick up, but the Johannesburg to Cape Town routes were just about full. “We are very, very happy with that.” Mr Andrew would not say how long he expected the airline to take to break even nor how much Safair had in its kitty to keep it flying in the meantime. He emphasised, though, that low cost did not mean low maintenance. “Absolutely not,” he said.
Department of Transport deputy director-general Zakhele Thwala told Parliament’s transport committee that the demise of low-cost airline 1Time in 2012 saw airfares double in one day. This demonstrated the effectiveness of competition in keeping airfares in check and he anticipated that the launch of FlySafair would have the same result.
Airports Company of SA (Acsa) CE Bongani Maseko also expressed the hope that the lower fares offered by the new airlines would encourage more people to travel, lift the number of passengers passing through airports and boost Acsa’s revenue.
Lower airport charges in future will also help contain the rise in airfares. Acsa is looking at a 5.6% tariff increase next year, followed by a 12% decline in 2016 and no change in 2017. The reason, Mr Maseko explained, was because Acsa was in a maintenance and refurbishment phase and did not need to undertake any major infrastructure investments for the next four to five years as it had sufficient capacity to carry it “way into the future”.
“We have largely agreed with the airlines that we don’t want to see the tariff spikes that we saw over the last three or four years. We have generally agreed that CPI-related tariffs are what the airline industry can afford. It is not in our interests to see tariffs go up hugely, neither is it in their interests.”
Mr Maseko also warned of the need for SA to develop a strategy to combat the growing penetration of Emirates airlines into the African continent using Dubai as its hub. He said Acsa was in discussions with South African Airways (SAA) about its long-term strategy to address this threat, which was not immediate because Johannesburg’s OR Tambo international airport was still far ahead of other African rivals in terms of its passenger traffic.
Neverthless, SA could not “sit back as a country and do nothing. It is not an Acsa issue but a country issue.” Other countries in Africa were positioning themselves to be more competitive than SA, he said.
The department’s Mr Thwala said amendments to the Acsa and Air Traffic Navigation Services acts were in the offing, to provide for a new model to determine tariffs by the independent regulating committee.
Fly Blue Crane will be launched by Blue Crane Aviation, in which former SAA and SA Express CEO Siza Mzimela is involved.