New airline puts industry in a jam
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New airline puts industry in a jam
New airline puts industry in a jam
Yet another entrant in overtraded domestic market could send SA aviation into a tailspin, writes Roger Makings
A new airline is set to wing its way into the no-frills, low-fare market dominated by kulula.com amid fears that this could lead to a price war and the demise of at least one existing operator.
New entrant 1Time will compete with the likes of kulula.com on the Johannesburg-Cape Town and Johannesburg-Durban routes.
"But you can rest assured it is going to have an impact on the other airlines, BA/Comair, Nationwide, Sun Air and SAA," said one industry source.
1Time, which will be equipped with leased twin-engined McDonnell Douglas MD82s, was conceived and will be run by some of the best brains in local aviation.
1Time's joint chief executive, Rodney James, said the first of two aircraft will arrive from the US this month and could be operational in time for the peak holiday season in December.
"Although we intend to start small, we have plans to double the fleet size within a year, depending on demand."
The newcomer will start with three return flights a day to Cape Town before expanding to Durban and increasing its Cape Town frequencies.
However, the domestic market is hopelessly overtraded and all the carriers are struggling to survive.
The entrance of another player will make the pie even smaller.
Asked how he expected to succeed in an already saturated market, James said the fares would be the lowest on offer.
"So much so we expect even to draw passengers away from the bus companies travelling to Durban and Cape Town."
He said that aircraft were acquired after September 11 and cost about 30% less than those bought before that date following the downturn in travel demand .
"Also, we plan to incentivise our staff through profit-sharing schemes, which will mean that more work will be done by fewer people."
With two of its major overheads significantly lower than those of its competitors, 1Time would gain the competitive edge, said James.
Another factor in its favour is that within the 1Time group there is a profitable engineering company, Aero Nexus, which will maintain the aircraft .
1Time's entrance into the market - in which it seeks to secure 60% of leisure travel and 40% of business travel - will initiate a price war that could test the resources of some competitors.
Kulula.com executive director Gidon Novick said: "We've been saving travellers more than 40% on fares since our launch and will always offer the lowest fares around."
He said kulula had a very low-cost base, but the one area in which there would never be any compromise was safety.
"If costs are cut beyond a certain point, safety will be compromised," Novick said.
In another reference to the dangers of cost-cutting, Novick warned that, in recent years, several airlines had gone to the wall, leaving passengers stranded.
"We must not forget what happened to passengers who had tickets on Phoenix Air, Intensive, Sun Air and Flight Star."
Nationwide financial director Peter Griffiths said the airline welcomed the competition, but that it would not be drawn into a price war.
"Our weapons are our service and overall value for money. There are no winners in a price war," he said .
Meanwhile, another airline intends starting flights from Johannesburg and Cape Town to Stansted Airport in the UK from next month.
Maiden Air CEO Rob Williamson said an all-economy-class B747 would be used to fly four times a week for two months beginning on December 14.
This will not be good news for local airline Nationwide, which launches its first foray into international travel with a service to Gatwick Airport near London at the end of this month.
"Thereafter, we will cease flights for two months until April, by which time we should be registered as a South African carrier and re-introduce the service using a twin-engined B767," said Williamson.
Thirty percent of Maiden' s bookings so far had come from the UK, following strong support from travel agents there, he said.
Yet another entrant in overtraded domestic market could send SA aviation into a tailspin, writes Roger Makings
A new airline is set to wing its way into the no-frills, low-fare market dominated by kulula.com amid fears that this could lead to a price war and the demise of at least one existing operator.
New entrant 1Time will compete with the likes of kulula.com on the Johannesburg-Cape Town and Johannesburg-Durban routes.
"But you can rest assured it is going to have an impact on the other airlines, BA/Comair, Nationwide, Sun Air and SAA," said one industry source.
1Time, which will be equipped with leased twin-engined McDonnell Douglas MD82s, was conceived and will be run by some of the best brains in local aviation.
1Time's joint chief executive, Rodney James, said the first of two aircraft will arrive from the US this month and could be operational in time for the peak holiday season in December.
"Although we intend to start small, we have plans to double the fleet size within a year, depending on demand."
The newcomer will start with three return flights a day to Cape Town before expanding to Durban and increasing its Cape Town frequencies.
However, the domestic market is hopelessly overtraded and all the carriers are struggling to survive.
The entrance of another player will make the pie even smaller.
Asked how he expected to succeed in an already saturated market, James said the fares would be the lowest on offer.
"So much so we expect even to draw passengers away from the bus companies travelling to Durban and Cape Town."
He said that aircraft were acquired after September 11 and cost about 30% less than those bought before that date following the downturn in travel demand .
"Also, we plan to incentivise our staff through profit-sharing schemes, which will mean that more work will be done by fewer people."
With two of its major overheads significantly lower than those of its competitors, 1Time would gain the competitive edge, said James.
Another factor in its favour is that within the 1Time group there is a profitable engineering company, Aero Nexus, which will maintain the aircraft .
1Time's entrance into the market - in which it seeks to secure 60% of leisure travel and 40% of business travel - will initiate a price war that could test the resources of some competitors.
Kulula.com executive director Gidon Novick said: "We've been saving travellers more than 40% on fares since our launch and will always offer the lowest fares around."
He said kulula had a very low-cost base, but the one area in which there would never be any compromise was safety.
"If costs are cut beyond a certain point, safety will be compromised," Novick said.
In another reference to the dangers of cost-cutting, Novick warned that, in recent years, several airlines had gone to the wall, leaving passengers stranded.
"We must not forget what happened to passengers who had tickets on Phoenix Air, Intensive, Sun Air and Flight Star."
Nationwide financial director Peter Griffiths said the airline welcomed the competition, but that it would not be drawn into a price war.
"Our weapons are our service and overall value for money. There are no winners in a price war," he said .
Meanwhile, another airline intends starting flights from Johannesburg and Cape Town to Stansted Airport in the UK from next month.
Maiden Air CEO Rob Williamson said an all-economy-class B747 would be used to fly four times a week for two months beginning on December 14.
This will not be good news for local airline Nationwide, which launches its first foray into international travel with a service to Gatwick Airport near London at the end of this month.
"Thereafter, we will cease flights for two months until April, by which time we should be registered as a South African carrier and re-introduce the service using a twin-engined B767," said Williamson.
Thirty percent of Maiden' s bookings so far had come from the UK, following strong support from travel agents there, he said.
Lovely aeroplane. I wonder who is going to do their training? Sounds like the end of the year to start operations might be a little optimistic. Have a couple of books on the MD-80, if anyones intersted!
Good Luck 1 Time
Good Luck 1 Time
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SA- UK ROUTE
It is about time other carriers, like this one, where encouraged and allowed to get into the UK/ SA direct market.
For too long the usual suspects, like BA/SAA and Virgin have ripped off passengers on the the UK/SA direct route by price fixing and capacity management strategies etc
I believe it can only be good for competition, pricing and choice for the market and overall UK travellers will welcome this and hopefully support them, I know when I want to travel to SA in the near future I will be giving them a call.
However, they seem to forget that London is not the only major city in the UK and passengers generally think it is such a burden to travel to London, it's a nightmare to get around. Why not look at setting up, say, in Manchester, I say this not just because i live nearby, I am sure the landing fees, accessibility and transport links will be more economically viable for an airline, perhaps more importantly, better catchment for passengers.
Good luck
Sandy Young
For too long the usual suspects, like BA/SAA and Virgin have ripped off passengers on the the UK/SA direct route by price fixing and capacity management strategies etc
I believe it can only be good for competition, pricing and choice for the market and overall UK travellers will welcome this and hopefully support them, I know when I want to travel to SA in the near future I will be giving them a call.
However, they seem to forget that London is not the only major city in the UK and passengers generally think it is such a burden to travel to London, it's a nightmare to get around. Why not look at setting up, say, in Manchester, I say this not just because i live nearby, I am sure the landing fees, accessibility and transport links will be more economically viable for an airline, perhaps more importantly, better catchment for passengers.
Good luck
Sandy Young
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Aye, but the last few paragraphs refer to Maiden Air servicing JHB/CPT - Stanstead.
OK, first we had Virgin, now Maiden, any guesses what the next new airline will be called?
OK, first we had Virgin, now Maiden, any guesses what the next new airline will be called?
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1time in SA
1Time may have a few good airline brains in its midst, but not one has any experience in running an ops centre. Will this be another glorified charter operation, like one of the other domestic carriers in SA. Beware of hollow promises!
Paxing All Over The World
Airways used to serve MAN. If memory holds up, it was an extension of the FRA service? JNB/FRA/MAN arriving around mid-morning? Then departing late afternoon for the same route. This was closed more then ten years ago (I think).
I agree that MAN should be a good bet, however, the ex-South Africa residents are predominantly in the South East, I should say.
Nationwide will be irritated as it spikes the guns of their March 04(?) start of JNB/LGW on the 767 all Y config.
I agree that MAN should be a good bet, however, the ex-South Africa residents are predominantly in the South East, I should say.
Nationwide will be irritated as it spikes the guns of their March 04(?) start of JNB/LGW on the 767 all Y config.
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Hold on to your Crew...
1 Time.....
I heard that they are looking at MD80 crew. Wonder what Sunair is going to do? A couple of their guys are MD80 rated.
"I steala your Crew.....one time....
Ha, Ha,
Hope it last, otherwise it will become "past time"
I heard that they are looking at MD80 crew. Wonder what Sunair is going to do? A couple of their guys are MD80 rated.
"I steala your Crew.....one time....
Ha, Ha,
Hope it last, otherwise it will become "past time"
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Heard rumour Millionair loosing couple of crews to 1 Time. Fortunately for Sunair they do not employ crew. Knocked on their door once. All their crew and aircraft are apparently leased from Millionair. Always thought oaks were happy at Millionair. Anybody got contact details for 1 Time ?
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Orgasmotron
I think Millionair will be the place to knock for employment, if they are losing their crew, who will be flying for Sunair.
Bet you they will start looking for CV's soon.
I think Millionair will be the place to knock for employment, if they are losing their crew, who will be flying for Sunair.
Bet you they will start looking for CV's soon.
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