This week, leading up to the school holidays, not a single seat was available on any airline in SA on a direct flight from Johannesburg to Cape Town until tomorrow. The same demand is expected over the December festive season, says Kirby Gordon, chief marketing officer at FlySafair.
“We are adding additional aircraft and will publish more flights. There have been announcements of the same by other carriers so recovery [from the Covid slump] is looking good.
“There is certainly scope for this additional capacity we are bringing in and we’re excited to grow our fleet and our team and get it out there.”
The shortage of seats was this week compounded when a ship with fuel destined for Cape Town ran into rough seas. Since Monday, the Airports Company of SA (Acsa) started rationing the fuel available to airlines operating to and from Cape Town, affecting the availability of flights.
The cheapest return ticket from Johannesburg to Cape Town for the first week of November, if booked now, starts at R2,564 on FlySafair, while the cheapest ticket on the same route and for the same time period in 2019 was R1,555 on Kulula, which is no longer flying.
But the domestic airline market is still suffering the after-effects of Covid restrictions and huge increases in the fuel price together with the demise of a number of airlines.
Comair/Kulula, Mango, SA Express and Air Namibia have closed, which had a further negative effect on the recovery rate of the Southern African aviation industry.
Airlines do their best to contain and mitigate the increased costs while keeping air travel and transport costs affordable
— Kamil Alawadhi, regional vice-president for Africa and the Middle East, International Air Transport Association
At a recent aviation summit in Kigali, Rwanda, Kamil Alawadhi, the International Air Transport Association’s (IATA) regional vice-president for Africa and the Middle East, ascribed the region’s lagging behind the rest of Africa directly to the closure of those airlines.
Early-September traffic data show that demand for air travel in Northern and Eastern Africa is within 5% of 2019 levels. West Africa has surpassed 2019 levels by 7%, but Southern Africa — of which SA is the biggest single market — lags far behind and is still 35% short of its 2019 demand and capacity, Alawadhi said.
Gordon confirmed that in January and February 2020 the SA domestic passenger seat capacity was about 1.5-million seats a month.
“This obviously dropped right down, but the market had recovered to about 1.2-million seats a month before Comair left. That set the industry back to about 900,000 to 1-million seats a month, but with growth from existing players including ourselves, we’re now seeing capacity climbing steadily.
“As of October 1, we are back to about 1.2-million seats in the market per month, meaning the Comair gap has been effectively plugged. Published schedules see this level continue into 2023, but it will definitely increase.”
According to Linden Birns, an aviation analyst, the latest financials of the Acsa are a good indicator of the health of the SA airline market.
In 2021-2022 financial year, the airports operator reduced its 2020 loss by more than half, to R1bn.
“Although Covid-19 travel restrictions were a major suppressant, one cannot escape the fact that Acsa’s state-owned cousins were attributable for a large portion of its absent footfall and, therefore, its revenue shortfall.
“I’m referring to SAA, which has downsized its fleet by 80%, and its network and schedule by about 90% compared with 2019, and the exits of SAA subsidiary Mango and its sister airline, SA Express,” says Birns.
FlySafair, Airlink and CemAir have added as much capacity as they can afford to while still managing their debt along with significantly higher input costs.
“Lift depends on Global Airways for its three aircraft and apparently wants more to provide more flights and to operate more routes. However, Global makes more money leasing its other aircraft and crews to operators in Europe during the northern summer. It remains to be seen if Global will redeploy additional planes to augment Lift’s small fleet during our summer season,” Birns says.
Airlink and FlySafair have recently added new routes to the local and regional market, with Airlink adding a direct route between Cape Town and Maputo in Mozambique three times a week.
FlySafair will operate a new route twice a week between Bloemfontein and OR Tambo International Airport (ORTIA) in Johannesburg.
Airlink has also resumed its flights between Richards Bay and ORTIA after an absence of 20 months, while the airline is in the process of adding seven more jets to its fleet to a total of 62 aircraft operating in the Southern African region.
Lift has been increasing its routes, adding flights between Durban and Johannesburg. Up to now Lift has concentrated on the ORTIA to Cape Town route.
According to Aaron Munetsi, CEO of the Airlines Association of Southern Africa (AASA), airlines are unable to shoulder the entire cost burden of much higher fuel prices, especially when it is accompanied by increases in taxes, service provider fees and charges and other inflationary input costs.
“Unsurprisingly, fares have risen to reflect this. However, no airlines want to deter customers from using their services. Airlines do their best to contain and mitigate the increased costs while keeping air travel and transport costs affordable.
“In August, Airlink reported that it was paying over 200% more for fuel than at the same time in 2021. IATA’s latest jet fuel monitor indicates that airlines worldwide will pay a combined extra $132bn (about R2.3-trillion) for jet fuel this year compared to 2021,” says Birns.
The jet fuel price in Africa is driven even higher by the lack of jet fuel refining capacity in South Africa or any other African countries
“The jet fuel price in Africa is driven even higher by the lack of jet fuel refining capacity in South Africa or any other African countries. As a result, all jet fuel is imported by sea and transported to storage depots from where it is distributed to airports and then sold to each airline’s individual fuel suppliers.”
Vandalism in KwaZulu-Natal during the July 2021 insurgency was compounded by the recent floods which disrupted operations at Durban harbour and knocked out rail supply lines. Until the rail lines were restored, this required fuel ships to be diverted to Maputo where fuel was offloaded into tankers and driven overland to destinations in SA. Airlines are unable to absorb all of these additional logistics costs, Birns says.
And this week fuel delivery delays again became an issue.
A ship due to arrive in Cape Town last weekend has been delayed, Acsa said.
Fuel suppliers have delivered an additional 2-million litres of jet fuel to the airport this week, which would normally provide for about two days’ supply. Airlines have also been advised to reduce their refueling in Cape Town as far as possible.
The association says fuel restrictions were likely to disrupt airlines’ schedules and possibly lead to cancelled flights “at a time when the industry and the economy can ill afford it”.
Meanwhile, Gordon ascribes the shortage of seats during the high traffic months to consumer demand recovering quicker and more readily than the supply of seats despite best efforts to scale up as quickly as they can.
“This September we’ve flown one and half times what we did September last year, but the market still seems to need a few more seats. As above though, there will definitely be more seats incoming, with our intention to add two additional aircraft to our schedule before the year is done with a few more lined up for early next year.
“The idea of recouping Covid losses in aviation is a misnomer. Those losses are sunk and we need to focus on making the most of the opportunities before us. There is also no incentive for airlines to willingly constrain supply to drive prices up.
“We do better by operating more flights and achieving good fares across a bigger number of seats with great economies of scale than we would operating fewer flights at exceptionally higher fares with limited economies of scale.
“The result is, and one sees this across the world, if fares are high on a route or in a market, someone will add more seats, and the first to get there is the player who’s likely to capture the market share,” Gordon says.
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