/ 30 April 2008

Travel agent ‘blindsided’ by Nationwide closure

Travel agent Flight Centre said it was ”blindsided” by the sudden closure of Nationwide Airlines and had gone into a crisis meeting to decide how to deal with the matter, with no information forthcoming from the airline, a spokesperson said.

”We were absolutely blindsided, we were completely unaware,” said spokesperson Amanda Hardy.

The company had been selling tickets until early on Tuesday afternoon, and as soon as it heard that Nationwide had closed shop, it phoned all its agents and told them to stop.

”When the information came through, we informed our stores and told them to stop selling tickets — now,” said Hardy.

Nationwide had operated international flights to London and Zambia, and domestic flights to and from Cape Town, Durban, Port Elizabeth, George, Mpumalanga and Johannesburg.

”Our cash-flow has become critical and as a result [we] have decided to voluntarily cease all flight operations until further notice,” said Nationwide’s chief executive, Vernon Bricknell, in a statement on Tuesday.

Last year an engine fell off a Nationwide Boeing 737-200 on take-off for Johannesburg from Cape Town International Airport. The aircraft landed safely half-an-hour later, but on November 30 the South African Civil Aviation Authority (CAA) grounded the airline on maintenance and airworthiness concerns.

The airline resumed operations in December but fuel costs increased and seat sales were low. It had hoped a black economic empowerment deal with the African General Equity group (AGE) would pull the airline through. However, this fell through.

The company website simply carried the media statement issued on its closure on Tuesday, with no contact details or further information.

Flight Centre said it had no idea yet what Nationwide’s refund policy to clients would be and as a company it would probably also lose commission.

The money paid over to it is immediately transferred to a billing and settlement plan (BSP), which in turn moves the money to the airline, so Flight Centre cannot refund customers itself as the money is not in its account, said Hardy.

”That is also difficult for the public to understand. We are hoping that now they [Nationwide] will start communicating with us and the public in the very, very near future because we are just as much in the dark. It is frustrating because there is nothing we can tell our clients.”

Meanwhile, the International Air Transport Association (IATA) withheld all (BSP) ticket sales payments due to Nationwide when the airline announced that it had closed, IATA said on Wednesday.

”IATA is monitoring the situation closely and will make every effort to meet Nationwide as soon as possible to agree how the money we are holding will be used,” the association said.

Solomon Makgale, spokesperson for Airports Company South Africa (Acsa), said that passengers who had not heard the news were still arriving at airports.

Acsa had placed a notice on the flight display board that flights had been cancelled indefinitely and staff were explaining the situation.

Mango spokesperson Hein Kaiser said it was trying to accommodate stranded passengers at the lowest fares possible, but because it was a holiday period there weren’t enough seats available.

”Yesterday [Tuesday] was chaos because nobody knew what was going on,” he said. ”We are flying at 95% to 96% capacity and our competitors are as well,” he said.

Independent aviation analyst Linden Birns said that seven airlines globally ”went to the wall” recently for similar reasons cited by Nationwide.

Jet fuel prices had risen 83% in the last year, 9% in the last month and 1% in the last week, he said, and tickets are sold in advance at sub-economic prices.

”It is very frustrating for everyone,” he said.

However, he noted that after the news of Nationwide, share prices in Comair and 1time surged.

Meanwhile, the United Association of South Africa (UASA), which represents about a quarter of those employed at Nationwide, said it had written a letter to Bricknell offering to help salvage the AGE deal.

It had also received a positive response from some airlines who had agreed to look at UASA members’ CVs as they looked for new jobs.

Nationwide were not available for comment. — Sapa