Nationwide ceases operations
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Nationwide ceases operations
South Africa's Nationwide Airlines has announced that it is to cease operations, due to a significant increased in the price of fuel, combined with declining load factors:
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Nationwide Airline Halts Operations on Revenue Slump (Update2)
By Garth Theunissen and Antony Sguazzin
April 29 (Bloomberg) -- Nationwide Airlines, a low-fare airline in South Africa, said it stopped flying due to financial difficulties stemming from increased fuel costs and loss of revenue from grounding its fleet last year.
``Our cash flow has become critical and as a result have decided to voluntarily cease all flight operations until further notice,'' Chief Executive Vernon Bricknell wrote in an e-mailed statement today, which was sent to Bloomberg News by Solomon Makgale, a spokesman for state-owned Airports Company South Africa. The airline issued a statement announcing the halt at 1:00 p.m. local time.
Nationwide's fleet was temporarily grounded on Nov. 30 last year by South Africa's Civil Aviation Authority after an engine fell off a plane as it took off from Cape Town's main airport. The plane returned to the airport safely but authorities ordered inspections of all Nationwide's aircraft saying they failed to meet maintenance requirements.
The airline achieved ``a gradual recovery'' after resuming operations in December and January and then in March and April experienced financial problems because of a ``30 percent increase in fuel costs coupled with a decrease in passenger load factors,'' Bricknell said in the statement.
Founded in 1991, Nationwide competes with Comair Ltd.'s Kulula.com division, 1Time Holdings Ltd. and state-owned South African Airways Ltd.'s Mango unit, in South Africa's low-fare market. Mango will offer stranded Nationwide customers preferential fares, the Johannesburg-based company said in an e- mailed statement.
Comair, 1Time Shares
Comair, which is partly owned by British Airways Plc, rallied with 1Time in Johannesburg trading after reports of Nationwide's closure.
Comair climbed 20 cents, or 9.5 percent, to 2.30 rand in Johannesburg, its biggest advance in almost three months. 1Time rose 3 cents, or 4.5 percent, to 70 cents.
Nationwide flies domestic routes in South Africa and operates a service to London's Gatwick airport with a fleet of 17 planes. The airline flies more than a million passengers a year, according to a Nov. 8 interview with Bricknell.
Nationwide Marketing Manager Roger Whittle as well as Financial Director Peter Griffiths didn't answer calls by Bloomberg News to their mobile phones. A spokesman for South Africa's Civil Aviation Authority, who declined to be identified, said he couldn't confirm the reports.
By Garth Theunissen and Antony Sguazzin
April 29 (Bloomberg) -- Nationwide Airlines, a low-fare airline in South Africa, said it stopped flying due to financial difficulties stemming from increased fuel costs and loss of revenue from grounding its fleet last year.
``Our cash flow has become critical and as a result have decided to voluntarily cease all flight operations until further notice,'' Chief Executive Vernon Bricknell wrote in an e-mailed statement today, which was sent to Bloomberg News by Solomon Makgale, a spokesman for state-owned Airports Company South Africa. The airline issued a statement announcing the halt at 1:00 p.m. local time.
Nationwide's fleet was temporarily grounded on Nov. 30 last year by South Africa's Civil Aviation Authority after an engine fell off a plane as it took off from Cape Town's main airport. The plane returned to the airport safely but authorities ordered inspections of all Nationwide's aircraft saying they failed to meet maintenance requirements.
The airline achieved ``a gradual recovery'' after resuming operations in December and January and then in March and April experienced financial problems because of a ``30 percent increase in fuel costs coupled with a decrease in passenger load factors,'' Bricknell said in the statement.
Founded in 1991, Nationwide competes with Comair Ltd.'s Kulula.com division, 1Time Holdings Ltd. and state-owned South African Airways Ltd.'s Mango unit, in South Africa's low-fare market. Mango will offer stranded Nationwide customers preferential fares, the Johannesburg-based company said in an e- mailed statement.
Comair, 1Time Shares
Comair, which is partly owned by British Airways Plc, rallied with 1Time in Johannesburg trading after reports of Nationwide's closure.
Comair climbed 20 cents, or 9.5 percent, to 2.30 rand in Johannesburg, its biggest advance in almost three months. 1Time rose 3 cents, or 4.5 percent, to 70 cents.
Nationwide flies domestic routes in South Africa and operates a service to London's Gatwick airport with a fleet of 17 planes. The airline flies more than a million passengers a year, according to a Nov. 8 interview with Bricknell.
Nationwide Marketing Manager Roger Whittle as well as Financial Director Peter Griffiths didn't answer calls by Bloomberg News to their mobile phones. A spokesman for South Africa's Civil Aviation Authority, who declined to be identified, said he couldn't confirm the reports.
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This smells of Sun Air all over again... except that time SAA played the 'we'll lower our prices to below what you can afford' game and blew Sun Air out of the water. To see Mango step in is... *UGH* It makes my flesh crawl.
Didn't help that BA didn't want to allow Virgin to bail Sun Air out either...
S.
Didn't help that BA didn't want to allow Virgin to bail Sun Air out either...
S.
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Lets face it, after their engine fell off, I thought twice about flying with them.. they were always a bunch of cowboys, you cant run an airline with a scrap condition fleet and dodgy maintainence.
Paxing All Over The World
Oil Price? Maybe the last straw for them but - all that I have heard about them - this was a natural end.
A relative of mine that is a pilot in ZA (ATPL for 12 years) has warned me for over 8 years not to fly with Nationwide as he did not trust their maintenance. On my visits, I did not use them and warned others not to. Is that fair? Well, poor maintenance was one of the main reasons for their closure.
As to whether SAA had a hand (passive or active) in this, I cannot tell although I would not be surprised. I doubt the anti-competition department of the .gov.za is as active as those in Europe where predatory pricing is concerned.
Without a doubt, with all those players, someone was going to close. I expect that - before the global recession is through - there will have been more/or mergers in South Africa, as there are in other other countries.
A relative of mine that is a pilot in ZA (ATPL for 12 years) has warned me for over 8 years not to fly with Nationwide as he did not trust their maintenance. On my visits, I did not use them and warned others not to. Is that fair? Well, poor maintenance was one of the main reasons for their closure.
As to whether SAA had a hand (passive or active) in this, I cannot tell although I would not be surprised. I doubt the anti-competition department of the .gov.za is as active as those in Europe where predatory pricing is concerned.
Without a doubt, with all those players, someone was going to close. I expect that - before the global recession is through - there will have been more/or mergers in South Africa, as there are in other other countries.
