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THE major aviation event of the year for 2013 actually occurred in November 2012, when 1time Airlines went into liquidation, as this was the catalyst which resulted in airfares continuing their upward spiral in 2013.
In 2012 airfares rose by an average 34% (source: SouthAfrica.TO measures of movements in cheapest airfares), following Velvet Sky's suspension of its flights in February 2012.
To add insult to injury, in 2013 flight price increases averaged another 20% (same source as above). This has hurt travellers in the pocket, but not kept them from flying. Consumer robustness is demonstrated by the fact that passengers travelling to and from OR Tambo International Airport increased by 1.7% from November 2012 to November 2013.
These airfare increases are reflected by the healthy results reported by Comair (which runs the Kulula and British Airways franchise in South Africa). On the other side of the fence, it is a concern that the state-owned carriers are still struggling to turn a profit.
South Africa's increased airfares have attracted a motley bunch of new airlines wanting to cash in, but who have been frustrated at every twist and turn by South Africa’s bureaucracy and anti-competitive laws (75% South African ownership is required to operate an airline in SA).
Fastjet made the first attempt of the year to get in on the action by trying to buy 1time Airlines, and when that didn’t work out, creating a joint venture with Edward Zuma and friends in an entity called "BlockbusterTrading 53”, which didn’t live up to its name.
Shortly after it failed to pan out, David Lenigas resigned as fastjet chairperson. Fastjet did, however, score a partial victory, when it started operating flights from Dar es Salaam to Johannesburg in October 2013.
FlySafair got the closest to starting domestic flights in South Africa, even opening for bookings on the Johannesburg to Cape Town flight route at the end of September 2013. Their attempt to fly was shot to the ground by a joint Comair/Skywise application to the North Gauteng High Court, which resulted in a temporary interdict preventing FlySafair from taking to the skies.
The issue was about the company not meeting the 75% local ownership requirement. FlySafair has subsequently done a BBBEE deal, rejigged the ownership of the company, and is reapplying for a licence.
While not slugging it out in court with FlySafair, Skywise Airline has been applying for its licence to operate in South Africa. The airline's team consists of some of the 1time founders, as well as Wayne Duvenhage (previously of Avis) and Johan Bortslap (who was MD of Sun Air).
The 1time ghost just won’t die, and Pak Africa Aviation is busy trying to resuscitate it. They plan on letting the subsidiary 1time Airlines go bankrupt, but want to retain the brand name and listing of the holding company.
1time Holdings’ ownership structure will be changed to also being owned by Global Aviation and Pak Africa Aviation. In return, 1time Holdings will buy 100% of Global Airways, whose trump card is that it holds the coveted Airline Operator Certificate for scheduled and non-scheduled flights in South Africa.
With four newcomers chomping at the bit to get in on the action in the South African aviation scene, 2014 promises to be another interesting year.
- Fin24
*Rob Baker is co-owner of South Africa Travel Online. Follow him on twitter on @southafricaTO.
In 2012 airfares rose by an average 34% (source: SouthAfrica.TO measures of movements in cheapest airfares), following Velvet Sky's suspension of its flights in February 2012.
To add insult to injury, in 2013 flight price increases averaged another 20% (same source as above). This has hurt travellers in the pocket, but not kept them from flying. Consumer robustness is demonstrated by the fact that passengers travelling to and from OR Tambo International Airport increased by 1.7% from November 2012 to November 2013.
These airfare increases are reflected by the healthy results reported by Comair (which runs the Kulula and British Airways franchise in South Africa). On the other side of the fence, it is a concern that the state-owned carriers are still struggling to turn a profit.
South Africa's increased airfares have attracted a motley bunch of new airlines wanting to cash in, but who have been frustrated at every twist and turn by South Africa’s bureaucracy and anti-competitive laws (75% South African ownership is required to operate an airline in SA).
Fastjet made the first attempt of the year to get in on the action by trying to buy 1time Airlines, and when that didn’t work out, creating a joint venture with Edward Zuma and friends in an entity called "BlockbusterTrading 53”, which didn’t live up to its name.
Shortly after it failed to pan out, David Lenigas resigned as fastjet chairperson. Fastjet did, however, score a partial victory, when it started operating flights from Dar es Salaam to Johannesburg in October 2013.
FlySafair got the closest to starting domestic flights in South Africa, even opening for bookings on the Johannesburg to Cape Town flight route at the end of September 2013. Their attempt to fly was shot to the ground by a joint Comair/Skywise application to the North Gauteng High Court, which resulted in a temporary interdict preventing FlySafair from taking to the skies.
The issue was about the company not meeting the 75% local ownership requirement. FlySafair has subsequently done a BBBEE deal, rejigged the ownership of the company, and is reapplying for a licence.
While not slugging it out in court with FlySafair, Skywise Airline has been applying for its licence to operate in South Africa. The airline's team consists of some of the 1time founders, as well as Wayne Duvenhage (previously of Avis) and Johan Bortslap (who was MD of Sun Air).
The 1time ghost just won’t die, and Pak Africa Aviation is busy trying to resuscitate it. They plan on letting the subsidiary 1time Airlines go bankrupt, but want to retain the brand name and listing of the holding company.
1time Holdings’ ownership structure will be changed to also being owned by Global Aviation and Pak Africa Aviation. In return, 1time Holdings will buy 100% of Global Airways, whose trump card is that it holds the coveted Airline Operator Certificate for scheduled and non-scheduled flights in South Africa.
With four newcomers chomping at the bit to get in on the action in the South African aviation scene, 2014 promises to be another interesting year.
- Fin24
*Rob Baker is co-owner of South Africa Travel Online. Follow him on twitter on @southafricaTO.
