A new no-frills budget airline, poised to make its debut within the next two months, is setting the scene for an all-out price war on South Africa’s overworked routes.
Airline infant 1Time will compete head-to-head with the country’s only current low-budget operator, kulula.com, on the lucrative Johannesburg-Cape Town and Johannesburg-Durban routes.
Both the airlines will operate on similar principles to Irish and British-based low-fare operators Ryanair and easyJet and will have the majority of their bookings done through the internet and sales directly over the counter.
But aviation industry observers say 1Time’s bold move to enter an already saturated market, serviced by five different companies from top to bottom, could threaten the existence of at least one operator if the market does not show growth.
”The reason why we are entering the market is that we truly believe that there is no real low-cost airline currently in the industry,” said 1Time’s marketing and operations director Rodney James.
”Kulula.com is going head-to-head with us, so this is going to be a price war. We are ready to see who will get war fatigue first,” he said.
1Time’s first aeroplane, a McDonnell Douglas MD82, which is capable of carrying around 150 passengers, will be delivered this month on lease from the United States, James said, with its first flight expected in the next six to eight weeks.
He said a second MD82 was expected for delivery at a later stage, with 1Time cashing in on the drop in prices following the September 11, 2001 attacks in the United States and a strengthened local currency against the dollar.
The announcement by 1Time comes at a time when South African domestic markets are hopelessly overtraded and all carriers were struggling to survive, the Johannesburg-based Sunday Times newspaper reported recently.
The entrance of another player will make the pie even smaller, it said.
In recent years, South Africa has seen the demise of at least four upstarts, leaving furious passengers stranded at airports with tickets to nowhere as the airlines went under.
”I think we are going to see blood on the wall in the near future,” said Linden Birns, an aviation consultant.
”It’s a very, very challenging and overtraded market. And to be successful there has to be more growth,” he said.
Another aviation industry observer told the Sunday Times: ”You can rest assured that it is going to have an impact on the other airlines, BA/Comair, Nationwide, Sun Air and South African Airways.”
Gidon Novick, a kulula.com executive director, said his company was excited with the prospect of competing head-on with 1Time.
”There will definitely be a price-war. But there is nothing that gets the juices flowing like the prospect of competition,” said Novick, who runs one of South Africa’s most successful airlines, starting off with one plane and a single route two years ago.
The airline operates on an easy-going style, with crew wearing jeans, dispensing on-board humour, and selling basic food and drinks.
By the start of October this year, kulula.com had carried 1,1-million passengers to five destinations around the country.
Currently, a return ticket ticket from Johannesburg to Cape Town costs R900 (115 euros, $140) on the airline, and Novick said and his company was planning to drop rates even further.
Said Birns: ”You have to be in it for the long-haul and forget about making a quick buck. This is not an industry for the faint-hearted.” – Sapa-AFP