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Low-cost airlines stepping up competition

Johannesburg - In its third route into Botswana - the others are Maun and Kasane -  Airlink is launching flights from Johannesburg to Gaborone on January 20 2014. 

The other two airlines operating Johannesburg to Gaborone flights are SA Express and Air Botswana.

Previously, SA Express and Airlink have avoided flying each other’s routes, but this changed at the end of September, when SA Express announced that it would be launching flights on three Airlink routes: Cape Town to George, Johannesburg to Nelspruit and Johannesburg to Pietermaritzburg.

Airlink responded by dropping fares on those routes and launching flights from Johannesburg to Bloemfontein, Johannesburg to Richards Bay and Johannesburg to Kimberley (these start on November 18 2013). 

Airlink also introduced a service fee for any passengers who want to book SA Express (or SAA) flights at their booking offices. 

The price war comes at a bad time for SA Express, who reported an operating loss of R25m in the last financial year.

Airlink’s response to the decision by SA Express to fly their routes indicates its unhappiness: “While Airlink welcomes competition on any of its routes on a fair and equal basis, we feel strongly about being taken on by a technically insolvent State Owned airline using the taxpayer’s funds to compete with us unequally.

"Airlink is in its own right a taxpayer contributing more than R400m in taxes (VAT, PAYE, and Corporate Tax) annually to the Fiscus, and it is ironic that the State sees it fit to use taxpayer’s funds to compete with its bona fide taxpayers,” it has previously said in a statement.  

SA Express believe that the fuel efficiency of its turbo prop Dash 8 Q400 gives it an edge: “We have very fuel-efficient aircraft that make our cost-per-seat prices more reasonable, so we will provide a much cheaper fare than the current operators.” 

 - Fin24

*Rob Baker is co-owner of South Africa Travel Online. Follow him on twitter on @southafricaTO
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