Market for low-cost airlines doubles

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By Audrey D’Angelo

Low-cost airline kulula.com was launched by Comair 10 years ago this month, and the industry has changed completely in that time. It was South Africa’s first low-cost airline. At the time it was launched both the domestic and international markets were much smaller than now and fares higher. Gidon Novick, one of Comair’s two joint chief executives, told me this week that the domestic market has doubled in size since then.

This is what happened in the rest of the world too, starting with the US and Europe, when low-cost airlines put flying within the reach of more people. But the real impact in this country came when 1Time was started, providing the first challenge to kulula. Some people who should have known better, if they saw what had happened in Europe, said the South African market was too small to sustain two low-cost airlines in addition to two full-service ones. Instead it grew rapidly as more people realised in a short time that flying had actually become affordable and fares dropped with the arrival of competition.

Now we have a choice of four low-cost airlines on the most popular “golden triangle” between Cape Town, Johannesburg and Durban, with the arrival first of Mango and, very recently, Velvet Sky. The tough economic conditions over the past two years has increased their customer numbers even more, at the expense of the full-service airlines, as more business people began to use them and they responded by providing extra services for passengers prepared to pay for them.

But Novick said this week that the market had been saturated for the past two years and he expects it to shrink after October 1 when Airports Company South Africa (Acsa) will increase the total amount of its charges by almost 70 percent. This view is shared by Glenn Orsmond, chief executive of the 1Time group, who said airport taxes had become exorbitant and would become worse.

The taxes will go on rising for the next four years to help Acsa meet the cost of enlarging and improving our main airports and constructing an entirely new one in Durban – according to airlines several years before it was needed – in time for the World Cup.

Our Cape Town International Airport certainly needed enlarging and Johannesburg’s OR Tambo is being developed as a hub airport and forecast to become one of the 20-busiest in years to come.

Emirates is so far the only international airline to have started flying into Durban since the new airport was built. It looks very much as though Comair’s plan to fly from there to London Gatwick, extending its British Airways (BA) franchise to that route, will be quietly dropped following a feasibility study carried out by BA.

There are only three days left to take advantage of a special offer by Emirates Airline on fares booked online for return trips to Istanbul, Nice, Venice, Frankfurt, Dusseldorf, Munich, Athens, Dubai, Mumbai, Chennai, Bangkok, Kuala Lumpur and New York. Tickets for these must be booked by August 31 for departures between September 1 and November 30.

British Airways (BA) is issuing its cabin crew with the newest iPods to give them up to the minute information about each customer, identified by seat number, with their special requests and needs, to enable them to offer more personalised service.

So far it’s at the stage of being tried out with 100 cabin crew but this is intended to be extended in the next few months. According to a spokesperson the airline is getting “great feedback” on the results. - Weekend Argus

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