South Africa is home to several low cost regional airlines, all operating in a highly competitive environment, which drives air fares lower and makes flying more affordable.
In an interview with AeroTime, Airlink CEO De Villiers Engelbrecht explained that low-cost carrier (LCC) FlySafair is “dominant”.
“They account for about 68% of the total capacity, and they continue to add capacity, as does South African Airways (SAA),” he said.
“We were at about 17-19% of capacity and are now down to 14% of the domestic market.”
Engelbrecht explained that Airlink has not added any domestic capacity in the last two years, having shifted capacity to regional markets.
He noted that the airline is not fascinated by market share, adding that this is not how it measures its success.
However, to remain competitive in the market dominated by other carriers, Airlink is undergoing its biggest re-fleeting in 30 years, adding ten Embraer E195-E2 narrow-body jets.
These will be the largest aircraft in Airlink’s fleet, accomodating 136 seats, instead of the 98 in the airline’s current E1 jets.
“We decided to stick with what we do well, and that is operate Embraer aircraft, and we achieved the same per seat costs as a narrow-body if you count it in a two-two configuration like the E2,” explained Engelbrecht.
Despite FlySafair’s domestic dominance, Engelbrecht explained that Airlin is the second biggest airline in South Africa in terms of capacity, but a clear leader in intra-African flights
“In the wider region, to and from South Africa, we offer about 62% of the capacity relative to our South African peers; that’s where our focus is for at least the next two years,” he said.
When asked about Airlink, as well as other airlines’ air fares, Engelbrecht explained that fares are benchmarked in hard currency per km, adding that the airline’s fares are around 40% of the global benchmark.
“In my view, this country is probably one of the cheapest places to fly in the world, while your cost as an airline is pretty much dollar-based and benchmarked to the global industry, but your fares are at 40% of the average,” he said.
Navigating a challenging environment
Besides the current skyrocketing prices and uncertain supply of jet fuel as a result of the conflict in the Middle East, airlines operating in South Africa face several other challenges.
“There has been a sustained infrastructure decay in South Africa over many years, and unfortunately the same decay crept into the aviation infrastructure,” explained Engelbrecht.
He explained that Air Traffic & Navigation Services (ATNS) withdrew all airport approaches in the last 24 months due to a lack of maintenance, forcing these to be redesigned before they ultimately expired.
“It’s difficult for a scheduled airline when there are no instrument flight procedures and there is weather, you often have to divert aircraft. It was horrible for the industry from a cost and growth perspective.”
Engelbrecht said that he could go on about the state-run Airports Company South Africa (ACSA) being a monopolist, or talk about water and electricity disruptions at airports, as well as general decay.
“This is how we invite guests into this country; I think it’s completely wrong,” he said.
Beyond current fuel supply limitation, as well as ongoing infrastructure challenges, South Africa’s airlines have several constraints to deal with.
“You’ve got airport constraints, more and more so, airspace constraints and also on the apron, believe it or not, and then you’ve got pilot constraints, which is becoming more and more concerning for us,” Engelbrecht said.
“In such an environment the only option is to increase your revenue per departure, and for that you basically cut down on frequency and increase capacity on certain routes.”
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