Mango - all you need to know about it (threads merged)
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Reading the above posts, a lot of people were saying the same thing about market saturation when 1time started- and the market grew prodigiously after their entry. Can anyone really claim to know what the market can handle- I think not. What I do know is that the biggest inhibitor to domestic airline growth in the future in South Africa is ACSA- all the airlines suffer under their cartel.
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Originally Posted by TooBadSoSad
If you want info on the LCC then take R50 to the dept of transport in Pretoria and they will give you a copy of the AOC application for TULCA (PTY) LTD. It includes CV's of the major postholders of which the CEO's post is a Mr Bezuidenhout, not a Mr Cluver. All the major postholders are current or retired SAA employees.
Registered address is:
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Nico, who is only 30 years old, is Head of Direct Channels, South African Airways.
Prior to joining SAA 5-years ago, with a tertiary background in Industrial Psychology, Transport Economics and an MBA, Nico started South Africa’s first Internet-based event ticketing company where he served as Chief Operating Officer responsible for Marketing, Operations and Distribution. His further relevant professional experience includes ad-hoc consulting on distribution strategy and contact centre operations.
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Kingpost and Beechbum.
I note your point of view Kingpost but agree with Beechbums interpretation of the the different markets-the SA LCC animal is a different beast to the Ryanairs and Easyjets. Our pricing structure being Rand based puts us at a disadvantage and believe you me, the yields in SA are LOW!!!! There is no way in hell that a US$ based lease(with Rand weakening) can compete fairly unless the SAA LCC resorts to all out war, loses a few more billions and destroys the weaklings in the process.Scary stuff!
I note your point of view Kingpost but agree with Beechbums interpretation of the the different markets-the SA LCC animal is a different beast to the Ryanairs and Easyjets. Our pricing structure being Rand based puts us at a disadvantage and believe you me, the yields in SA are LOW!!!! There is no way in hell that a US$ based lease(with Rand weakening) can compete fairly unless the SAA LCC resorts to all out war, loses a few more billions and destroys the weaklings in the process.Scary stuff!
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Yes, you right, Deskjockey!!! Now don't get me started on ACSA - that's a WHOLE new thread potential and I'm not sure I have the energy for that with it being a Friday and all. As this is an Airline thread and not an Airport thread, best I stay away.
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Business Times 27th August 2006
Whole article about the SAA LCC.
Apparently they are registered as TULCA (Pty) Ltd but will operate as Mango.com (with their aircraft painted in Orange livery aka EasyJet style..)
It is just strange that Mango.com already exists on the web as a Clothing Company...
Did however hear from another source that indeed 4 737-800's are being painted in Orange at SAA Paintshop.
In the article Nationwide also admits that it has become the Employment "Agency" for the LCC FO's while Captain's were all retired ex SAA Captains.
Apparently they are planning to do 26 return flights a day starting from the 1st October 2006.
Destinations: Johannesburg, Cape Town, Durban and Bloemfontein.
Now I wonder whether the next batch of Nationwide FO's will also have to pay for their ratings with VB - If you ask me, it will be Yes + 5 year contract...
Whole article about the SAA LCC.
Apparently they are registered as TULCA (Pty) Ltd but will operate as Mango.com (with their aircraft painted in Orange livery aka EasyJet style..)
It is just strange that Mango.com already exists on the web as a Clothing Company...
Did however hear from another source that indeed 4 737-800's are being painted in Orange at SAA Paintshop.
In the article Nationwide also admits that it has become the Employment "Agency" for the LCC FO's while Captain's were all retired ex SAA Captains.
Apparently they are planning to do 26 return flights a day starting from the 1st October 2006.
Destinations: Johannesburg, Cape Town, Durban and Bloemfontein.
Now I wonder whether the next batch of Nationwide FO's will also have to pay for their ratings with VB - If you ask me, it will be Yes + 5 year contract...
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....and a compulsory 6 month notice period in the contract (it already stands at a ludicrous 3 month period).
Bloemfontein?!? Does that suit the high volumes needed for a LCC? Seems odd to me....
Bloemfontein?!? Does that suit the high volumes needed for a LCC? Seems odd to me....
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I’ve heard of this 3 month notice period story- that amounts to an unfair labour practice. Regardless-if I was getting shafted like that and I had an opportunity to move on I would give one month notice, settle my bond- assuming I hadent paid for my rating myself
, and move on. If old VB wanted to take it further then I would feel quite comfortable putting myself in the judicial system’s hands. Im quite sure that a case could be made for CE exploiting its crew. Frankly, even if I lost- paying back the 2 months salary (especially at their poor salary scales ) is a small price to pay for getting into an operation that offers half way decent career progression opportunities.
, and move on. If old VB wanted to take it further then I would feel quite comfortable putting myself in the judicial system’s hands. Im quite sure that a case could be made for CE exploiting its crew. Frankly, even if I lost- paying back the 2 months salary (especially at their poor salary scales ) is a small price to pay for getting into an operation that offers half way decent career progression opportunities.
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Dear all
Just an update on the "orange" B737. In actual fact the B737-300 in orange is the first B737-300 pax a/c converted into a freighter a/c by SAA Technical. This is for TNT BRU (OO-TSI).
The B737-800 currently being painted as a SAA logo jet for a new product to be introduced shortly.
Thanx
E
Just an update on the "orange" B737. In actual fact the B737-300 in orange is the first B737-300 pax a/c converted into a freighter a/c by SAA Technical. This is for TNT BRU (OO-TSI).
The B737-800 currently being painted as a SAA logo jet for a new product to be introduced shortly.
Thanx
E
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Deskjocky,
I note your comment re 1Time's entry to the market: However it is just the scale of things that causes me to raise an eyebrow.
Can you confirm that SAA will not reduce its domestic capacity?
If the projections are for 14 aircraft with +/- 1-2 years that is an awful lot of extra capacity.
Now if we assume that TULCA is only domestic - surely it won't be able to fly regional due to BASA restrictions, then TULCA's success can only come if pax migrate to it from other carriers. Which is all well and good in a free market but when a technically insolvent state owned company launches a new business such as this designed to under cut competition, the court cases will follow I'm sure.
My other observation is regarding the branding of SAA, arguably one of SA's strongest brands, there seems to have been a total lack of care taken in recent years about this....sad but I guess that's politics, but surely however TULCA will further weaken/dilute this?
Are you able to tell us whether the aim of TULCA is that it is sold off as a seperate entity one day......and what initial capitalisation of TULCA is?
Rgds
GT
I note your comment re 1Time's entry to the market: However it is just the scale of things that causes me to raise an eyebrow.
Can you confirm that SAA will not reduce its domestic capacity?
If the projections are for 14 aircraft with +/- 1-2 years that is an awful lot of extra capacity.
Now if we assume that TULCA is only domestic - surely it won't be able to fly regional due to BASA restrictions, then TULCA's success can only come if pax migrate to it from other carriers. Which is all well and good in a free market but when a technically insolvent state owned company launches a new business such as this designed to under cut competition, the court cases will follow I'm sure.
My other observation is regarding the branding of SAA, arguably one of SA's strongest brands, there seems to have been a total lack of care taken in recent years about this....sad but I guess that's politics, but surely however TULCA will further weaken/dilute this?
Are you able to tell us whether the aim of TULCA is that it is sold off as a seperate entity one day......and what initial capitalisation of TULCA is?
Rgds
GT
Paxing All Over The World
George Tower
Surely, the whole plan would be for SAA to move the vast majority of it's domestic capacity to the LCC?
Personally, I think that this is all about old style central govt thinking. I have said very early on in this thread that the ZA govt and SAA are ten years behind the thinking and you only have to look around the world to see how these operations succeed and/or fail.
I suspect (and fear) that this process will provide jobs for all the older boys and the younger ones will lose. The younger FOs in mainline are seeing their future trashed. They can join the LCC and lose money and seniority, or stay in mainline ... for what? The a/c they were going to fly are now in LCC.
Lastly: the consultants and the banks will, of course, make a mint.
Can you confirm that SAA will not reduce its domestic capacity?
- Shift the a/c off the SAA register
- Shift the staff off to new contracts, so as to duck out from long term pensions and other costs
- Duplicate large parts of management and so provide more jobs for the boys and as a job creation scheme in general (make the ZA economy seem better)
- Provide shed loads of jobs for consultants across the next few years, many of whom are retired buddies (because they know the market
) - The above will improve the balance sheet of SAA, either to privatise or simply to make it look like an economically well managed company
- Even if none of that happens and market forces destroy the dream, they will have appeared to be taking strong steps and trying new (ie old) things
Personally, I think that this is all about old style central govt thinking. I have said very early on in this thread that the ZA govt and SAA are ten years behind the thinking and you only have to look around the world to see how these operations succeed and/or fail.
I suspect (and fear) that this process will provide jobs for all the older boys and the younger ones will lose. The younger FOs in mainline are seeing their future trashed. They can join the LCC and lose money and seniority, or stay in mainline ... for what? The a/c they were going to fly are now in LCC.
Lastly: the consultants and the banks will, of course, make a mint.
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It's a bit hard to believe the routings, especially Bloemfontein. I even get the idea that 1Time isn't doing that well on the route. This morning I flew CE JNB to GRJ, checked in next to where 1T check-in was for Bloem, and only saw 2 people checking in around 50mins before the flight, then it also departed just before us, being about 5mins early and operated with ZS-ANX?
Would think that Tulca would rather first start to PLZ or GRJ before going to Bloem at a later stage, especially before the summer holidays...?
Would think that Tulca would rather first start to PLZ or GRJ before going to Bloem at a later stage, especially before the summer holidays...?
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The younger FOs in mainline are seeing their future trashed. They can join the LCC and lose money and seniority, or stay in mainline ... for what?
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SAA is a classical legacy carrier - propped up by the the SA taxpayers. It will never be too late
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And this is what Business Day had to say...........
South Africa: Monday Comment - Just Who Will Pay the Price If Lemon Airways' Mango Goes Pear Shaped?
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Business Day (Johannesburg)
COLUMN
August 28, 2006
Posted to the web August 28, 2006
Rob Rose
Johannesburg
MANY people believe South African Airways (SAA) is something of a lemon, so just how wise is it that the airline is steadying itself to launch its own low-cost airline, evidently to be labelled Mango?
A fruity decision indeed, and if it doesn't work one hopes those involved will get the sack. If you were to believe SAA's rivals, you might as well pre-empt the excuses, and sack them now.
The problem is SAA is hoping to regain market share through this low-cost airline. But with a cost structure that is bulkier than that of Comair's kulula.com, 1time or Nationwide, will SAA be able to undercut its rivals?
Already Nationwide, kulula and 1time have lodged objections to SAA's licence application -- complaints that will be heard on September 23.
This week, 1time will meet with the Competition Commission to lobby it to intervene. Comair will soon do the same.
"We don't believe that SAA will be able to launch this low-cost airline without subsidising it," says 1time CEO Glen Orsmond.
"We would be happy to take them on if they were displaying their true costs but if SAA subsidises this low-cost airline simply to regain market share from us, this is not in the interests of true competition," he says.
This is the crux: there is concern that SAA will simply pump as much money as it takes (ultimately cash from taxpayers) into Mango to rub out rivals.
Once these rivals collapse, the fear is SAA will simply shut its low-cost airline, claiming it "wasn't making money", before jacking up fares again.
Without any subsidy and in the context of its bloated overheads and infrastructure, this Mango will certainly struggle to match the ticket prices of kulula and 1time.
For example, 1Time and kulula use MD82 aircraft but SAA is reputed to be set to lease a number of 737-800s for Mango. While 1time values its MD82s at about $4,5m apiece, the 737-800s are more in the region of $45m.
So, if 1time's annual insurance bill is $7m, then SAA's low-cost airline could face an insurance tab of about $70m a year.
Then there are the overheads. SAA's last annual report showed that by March last year, the state-owned airline had 73 aircraft and 11601 employees. Comair's annual report showed that by June last year, it had 22 aircraft and 1738 employees. So SAA has 158 employees per aircraft, double the manpower that Comair uses (79 per aircraft).
SAA is also far from financially fit in its "normal" ticket business.
As this column noted in July, not only did SAA scrape a R65m profit for the year to March after impressive tinkering, there are also questions about its solvency.
Not only does SAA's R8,2bn in short-term liabilities dwarf its R5,2bn in short-term assets, but it has also mysteriously reported a R6,1bn loan as "capital" rather than a "liability".
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If SAA is not prospering in a "normal market", how does it plan to succeed in the more cutthroat low-cost environment?
Given that government has been called on to provide taxpayers' money to rescue SAA before, there will be nasty recriminations if taxpayers' cash is called on once more for a strategy that was ill-advised in the first place.
If SAA's Mango goes pear shaped, fingers will be pointed firmly at government for not speaking up earlier.
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Business Day (Johannesburg)
COLUMN
August 28, 2006
Posted to the web August 28, 2006
Rob Rose
Johannesburg
MANY people believe South African Airways (SAA) is something of a lemon, so just how wise is it that the airline is steadying itself to launch its own low-cost airline, evidently to be labelled Mango?
A fruity decision indeed, and if it doesn't work one hopes those involved will get the sack. If you were to believe SAA's rivals, you might as well pre-empt the excuses, and sack them now.
The problem is SAA is hoping to regain market share through this low-cost airline. But with a cost structure that is bulkier than that of Comair's kulula.com, 1time or Nationwide, will SAA be able to undercut its rivals?
Already Nationwide, kulula and 1time have lodged objections to SAA's licence application -- complaints that will be heard on September 23.
This week, 1time will meet with the Competition Commission to lobby it to intervene. Comair will soon do the same.
"We don't believe that SAA will be able to launch this low-cost airline without subsidising it," says 1time CEO Glen Orsmond.
"We would be happy to take them on if they were displaying their true costs but if SAA subsidises this low-cost airline simply to regain market share from us, this is not in the interests of true competition," he says.
This is the crux: there is concern that SAA will simply pump as much money as it takes (ultimately cash from taxpayers) into Mango to rub out rivals.
Once these rivals collapse, the fear is SAA will simply shut its low-cost airline, claiming it "wasn't making money", before jacking up fares again.
Without any subsidy and in the context of its bloated overheads and infrastructure, this Mango will certainly struggle to match the ticket prices of kulula and 1time.
For example, 1Time and kulula use MD82 aircraft but SAA is reputed to be set to lease a number of 737-800s for Mango. While 1time values its MD82s at about $4,5m apiece, the 737-800s are more in the region of $45m.
So, if 1time's annual insurance bill is $7m, then SAA's low-cost airline could face an insurance tab of about $70m a year.
Then there are the overheads. SAA's last annual report showed that by March last year, the state-owned airline had 73 aircraft and 11601 employees. Comair's annual report showed that by June last year, it had 22 aircraft and 1738 employees. So SAA has 158 employees per aircraft, double the manpower that Comair uses (79 per aircraft).
SAA is also far from financially fit in its "normal" ticket business.
As this column noted in July, not only did SAA scrape a R65m profit for the year to March after impressive tinkering, there are also questions about its solvency.
Not only does SAA's R8,2bn in short-term liabilities dwarf its R5,2bn in short-term assets, but it has also mysteriously reported a R6,1bn loan as "capital" rather than a "liability".
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Southern Africa
South Africa
Economy, Business and Finance
Travel and Tourism
If SAA is not prospering in a "normal market", how does it plan to succeed in the more cutthroat low-cost environment?
Given that government has been called on to provide taxpayers' money to rescue SAA before, there will be nasty recriminations if taxpayers' cash is called on once more for a strategy that was ill-advised in the first place.
If SAA's Mango goes pear shaped, fingers will be pointed firmly at government for not speaking up earlier.
--------------------------------------------------------------------------------
Copyright © 2006 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). Click here to contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material.
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Well, if looking at SAA's latest Paint Job on 737-800 ZS-SJS, advertising the newly launched Voyager Credit Cards, we could be in for some interesting Paint Schemes (logo's) when the LCC is launched (I hope...)
Must say, it looks like a job well done and from a Marketing perspective it certainly hits the spot!
Must say, it looks like a job well done and from a Marketing perspective it certainly hits the spot!
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www.flymango.co.za 
The domain has been registered to SAA and the site is currently under construction
(According to Traderpage etc.)
The domain has been registered to SAA and the site is currently under construction
(According to Traderpage etc.)