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New SA domestic airline to take flight
Thursday, 18 October 2012
At a time when South Africa’s aviation industry faces some of its greatest challenges – with airlines reporting major losses, implementing turnaround strategies and applying for business rescue – a new domestic airline, FlyGoAir, is about to take to the skies.

“FlyGoAir is bold in wanting to take the skies in tough times,” admits CEO, Reg Sivsanker. But he says the airline will take advantage of a gap in the air travel market by operating an “affordable premium service” on routes that are currently not served by any other airline.

At this stage, little is known about FlyGoAir, other than its route plans. The airline plans to launch its first route on November 26 between Lanseria and the Kruger Mpumalanga International Airport (KMIA). The expected fare is R999pp one way, inclusive of all taxes.

With Lanseria as its major hub, FlyGoAir also plans to launch another two routes in January, to Polokwane and Pietermaritzburg respectively. Also in the pipeline for next year are flights from Lanseria to Bloemfontein and George as well as a service from KMIA to Cape Town.

Sivsanker explains that in the future the airline hopes to expand its services by adding flights to the more popular destinations, which, he says, will further improve FlyGoAir’s competitive edge.

The airline aims to appeal to a mix of business and leisure travellers. It has chosen to offer in-flight services such as meals, beverages and alcohol and has also designed a unique loyalty reward programme, in which passengers qualify for a free flight after every six flights flown.

FlyGoAir will work with an online reservation system, which will take bookings from only two calendar months in advance. Sivsanker explains: “Passengers can be assured; they will not have to suffer the same fate as those passengers who lost money on advance bookings on airlines that folded.”

Sivsanker says more information regarding details of the airline’s management and operations would be revealed when the airline goes live, which is expected this week (October 22-26).

 Deep pockets

Although FlyGoAir has appealed to the public and the industry to be positive and “welcome the airline that is trying to make a difference by adding value and choice to air travel in South Africa”, industry players warn that it had better have deep pockets if it wants to survive in the current economic climate.

“Anyone trying to launch an airline in the current trading environment is extremely rich or brave,” says Erik Venter, Comair CEO. “Fuel is at its highest price in history, as are airport charges. An added challenge for any operation from Lanseria is that fuel has to be brought in by road transport. Further to this, the market is in decline as a result of higher ticket prices needed to cover operating costs.”

Chris Zweigenthal
, CE of Aasa, agrees: “FlyGoAir is entering the market at a time when the trade is not growing, which will undoubtedly put pressure on an already stretched market.”

Blacky Komani, 1time CEO, adds the current state of the aviation industry in South Africa is very competitive, with most operators reporting losses due to overcapacity and high input costs. “I sincerely hope the new player has deep pockets to weather the aviation storms. The last thing the industry needs is another player going under.”

But, he adds, there may be niche markets suitable to innovative route and aircraft combinations. Allan Moore, Barsa CEO, agrees. He explains that if a new low cost or low fare carrier were to service points that are unique, and where there is demand, it would be “a breath of fresh air”. “The only real success stories in the global LCC industry are where airlines operate on an underserved or new market, and where they have a business plan that caters for the introduction of newer fuel efficient aircraft.”

He says problems tend to arise when a new carrier wants to go nose to nose with established carriers on established routes, which inevitably leads to fare wars. “What often happens is that a new entrant lowers the price below what is viable and the rest of the competition lowers their fares in response, which is detrimental to the industry as a whole.”

Dorine Reinstein
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