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Old December 11th, 2012, 08:05 AM   #1
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Mango News and Developments

BIG step. Very few carriers globally offer this, let alone budget carriers.

Mango flights between Durban and Jo'burg to have free G-Connect in-flight Wi-Fi

11/12/2012

Airline seeks record number of connections.

G-Connect In-Flight Wi-Fi will be available free of charge to Mango Guests on all enabled flights between Durban and Johannesburg, in both directions. The airline plans to break connectivity records during this time and more than double its lead on the global uptake average of 8%. Mango’s G-Connect In-Flight Wi-Fi service was launched in May this year. The gratis period takes place during December through to 31 January 2013.

Mango expects to transport more than 75 000 Guests on the Durban and Johannesburg route between 11 December until 31 January 2013. “In line with our current above average uptake ratio of approximately 9-10%, our aim is to break all records with a target of more or less 20% of traveller volume on the route,” says Mango CEO Nico Bezuidenhout. Should Mango achieve this, it would be the highest Wi-Fi usage ratio ever achieved on any route, anywhere.

With an up-time of over 95% and average speeds of 1Mbs on enabled aircraft, the G-Connect In-Flight Wi-Fi service exceeds many terrestrial line speeds. “Even during beta-phase, system performance has been exceptional,” says CEO of G-Connect parent Wireless-G Carel van der Merwe, “and we are confident that when we put the service to the ultimate test by inviting a legion of connections, it will stand up to the challenge.” Van der Merwe adds that the record attempt will play a pivotal role in ensuring technical readiness as the system exits its beta-phase.

Next year Mango and G-Connect plan to introduce on-demand entertainment, live television and limited games across its In-Flight Wi-Fi network. “Imagine an experience beyond email, browsing and tweeting; a fully interactive and user-led entertainment basket available at the click of a mouse or a swipe on a tablet,” says Bezuidenhout, who adds that G-Connect In-Flight Wi-Fi marked the beginning of a new phase in the airline’s history, a future-focused path of network and fleet expansion as well as the introduction of more technology to enhance Mango’s overall travel experience.

Recently Mango became the first South African airline to offer a booking and payment channel through its mobi-site with plans afoot to launch an iPad application soon.

http://www.moneyweb.co.za/moneyweb-s...annesburg-to-h
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Old December 11th, 2012, 03:18 PM   #2
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Quote:
Originally Posted by dysan1 View Post
Imagine an experience beyond email, browsing and tweeting
A domestic route hardly offers time for more than this IMHO. Maybe on JNB-CPT you can squeeze in an episode of Isidingo or something, yes. But on JNB-DUR? Shucks, one Facebook update and you're already preparing for the landing!
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Old December 11th, 2012, 04:58 PM   #3
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Hardly different from anywhere else in the world mate. And if u wanna watch a shoe u don't need WiFi for that. This need to be congratulated. Its ahead ahead of almost all world regions
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Old December 12th, 2012, 06:38 AM   #4
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Look I think it's great that they do all this, as long as they don't inflate their prices to pay for all this tech. Then it kinda defeats the purpose and it's no longer a case of being a LCC (not that they're exactly cheap anyways).
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Old December 12th, 2012, 07:47 AM   #5
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Great move
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Old July 9th, 2013, 02:31 PM   #6
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Two good pieces of analysis on Mango.

South Africa's Mango, the often forgotten budget airline subsidiary, starts to pursue faster growth

South African Airways' (SAA) low-cost subsidiary Mango plans to pursue further expansion as it attempts to leverage its position in the domestic market, which has strengthened significantly over the last year. The carrier over the last year has completed the largest expansion phase in its seven-year history, exploiting consolidation in the South African market to increase market share and return to profitability.

The collapse of two LCC competitors in 2012 left Mango and Comair subsidiary Kulula as the only players in South Africa’s dynamic LCC sector. A new carrier is expected to eventually enter the market, leading to another possible phase of over-capacity and irrational competition. But Mango is now well positioned to fend off any new competition and gain more global recognition as a successful example of a full-service airline group budget subsidiary.

Mango is still a tiny carrier with a low global profile. Its counterparts in Asia have received significantly more attention for pioneering the LCC subsidiary strategy. But Mango’s hybrid model has quietly succeeded, providing the building blocks for growth and a bright outlook.

Mango launched in Nov-2006 as part of a new multi-brand strategy for the SAA Group, which at the time faced increasing LCC competition and recognised the huge opportunities at the bottom end of the market. Mango was the third LCC in South Africa, following the 2001 launch of Kulula and the 2004 launch of (now defunct) 1time.

Kulula and 1time were able to quickly capture over 20% of South Africa’s domestic market. As in the case of most markets experiencing its first taste of LCCs, the market share gains came mainly at the expense of the flag carrier although the total size of the market also increased significantly as the introduction of low fares stimulated demand. South Africa’s domestic market grew by about 50% in the three years prior to Mango’s entry. Rapid growth continued in the first year after Mango’s launch but has since slowed considerably.

Mango’s expansion was very slow through its first five years

Mango’s operation within a few weeks after its launch consisted of four 737-800s. But it was not until 2011 that the carrier added its fifth aircraft. The network was also stagnant until flights from Cape Town to Johannesburg's alternative airport Lanseria was added in Jun-2011. Lanseria became only the fifth airport served by Mango, an incredibly low figure for a LCC in its fifth year of operations.

Mango flew 1.5 million passengers in the year ending 31-Mar-2008 (FY2008), its first full fiscal year of operations. But traffic shrunk to 1.3 million in FY2009 and FY2010 and did not surpass the 1.5 million level until FY2012, when the fifth aircraft was finally added.

Mango annual passenger traffic: FY2008 to FY2012


Source: CAPA – Centre for Aviation and airline reports
Note: Fiscal year ends 31 March

Mango annual RPKs: FY2008 to FY2012


Source: CAPA – Centre for Aviation and airline reports
Note: Fiscal year ends 31 March

Three years of shrinkage or zero growth is very unusual in the LCC sector, particularly for a new LCC trying to establish a foothold in a competitive market. But the Mango management team preferred to focus initially on perfecting its model and patiently waited for the inevitable consolidation.

“The South African market has always been over-supplied,” Mango CEO Nico Bezuidenhout recently told CAPA. “Normality has to prevail at some point. The market simply cannot stomach the over-supply situation indefinitely.”

Mango was also confronted with unfavourable conditions, including a slow economy, rising fuel prices and intense competition. South Africa’s economy shrunk in 2009 and grew by less than 3% in 2010.

Mr Bezuidenhout, who has led Mango since the pre-launch phase and also just completed a four-month term as interim CEO of parent SAA, said the strategy was “not necessarily to be conservative” but Mango management “always wanted to ensure growth on a stable platform.” He added that the initial years were spent refining operations, processes and distribution networks.

Mango builds leading distribution network and adopts hybrid model

The distribution network was particularly important as Mango recognised it needed to pursue alternatives to attract first time fliers in Africa, where credit cards usage is not universal. Mango became the first and is still the only African carrier to accept store charge cards. It was also the first South African carrier to offer mobile bookings and claims to offer more distribution channels and payment options than any competitor. “Mango has the broadest distribution network on the African continent in terms of non traditional connections,” Mr Bezuidenhout says.

Mango also has evolved by offering products geared at the business traveller. Its Mango Plus product provides lounge access, unlimited flight changes without fees as well as vouchers for on board food and drinks. In FY2012 it developed a travel management system to deliver inventories to corporate customers.

While Mango has adopted some components of the hybrid model, the carrier maintains a strict low-cost focus and, like most LCCs, will not hybridise if this is at all compromised. “Sometimes we misunderstand the concept of low-cost carriers,” Mr Bezuidenhout said. “The concept of low cost carriers is about keeping simplicity. If you can implement a codeshare arrangement while keeping your cost structure true and keeping your process simplified why not? If you can offer a passenger a business class lounge without you incurring the overhead cost for it, without you running and managing lounges – or if you can offer on-board internet access without incurring the capital cost for doing so and still maintaining the lowest cost structure in the industry, the quickest turnaround times and the best on time performance – does that make you anything less of a purist LCC?”

Mango looks forward to two-way codeshares with SAA and new partnerships

Mango started codesharing with SAA in 2010, initially on Mango-operated flights between Cape Town and Durban. In Sep-2011 the codeshare was extended to include the new Cape Town-Lanseria route, which is not served by SAA. Passengers flying on the SAA code receive snacks and beverages and accrue SAA frequent flyer points. Harmonisation of baggage policies is not an issue as Mango offers all passengers 20kg of complimentary checked bags with an extra allowance of 10kg provided to Mango Plus passengers.

Mango expects to extend the SAA codeshare to more Mango routes and ultimately SAA-operated flights. Selling on SAA, or potentially other airlines, would allow Mango to leverage its investment in distribution channels, including retail sales. “It stands to reason that we would like to leverage our strength in distribution so that it may not be inconceivable for us to place our code on the likes of SAA or other carriers,” Mr Bezuidenhout said.

He added that Mango would be limited to selling on SAA short and medium-haul flights within Africa because South African Civil Aviation Authority restrictions do not allow an airline to codeshare on a route operated by a partner carrier unless they can in theory operate the route with their own fleet. As Mango has no intentions of adding widebody aircraft, it will only be able to sell SAA-operated flights of up to six hours.

Mango has intentionally built its in-house reservation system to enable it to codeshare with other carriers. Like other LCCs, Mango only seeks light codeshares that do not have the complexity of traditional partnerships.

“We can’t operate in the fullest traditional sense of codesharing because that interjects complexity,” Mr Bezuidenhout explained. “It does require a give and take. It’s difficult to get airlines that are set in their ways to adjust. But that is the basis on which we can accommodate codesharing. And we have found that some of the existing more well established LCCs take a similar point of view.”

Mango sees opportunity to more than double domestic operation by 2017

Codeshares with foreign carriers serving South Africa could provide a new stream of passengers, boosting yields and unlocking additional opportunities for growth.

Mr Bezuidenhout said Mango has already seen a 44% increase in passenger levels on a year-over-year basis, based on traffic figures for early Jun-2013. This was driven by a 40% increase in capacity and a 4 point improvement in load factor. Mango is confident further growth can be pursued as it looks to leverage the position it has built up in its first seven years and its investment in alternative distribution channels.

While Mango plans to pursue opportunities internationally, there are still opportunities for further domestic growth. Mr Bezuidenhout believes Mango can grow its domestic operation to a fleet of 15 aircraft before reaching saturation. He expects Mango to reach the 15 aircraft level in “three to four years”.

Mango currently has a fleet of six 737-800s with 186 seats in single class configuration and one wet-leased 737-300. It plans to end 2013 with a fleet of eight 737-800s as two more 737-800s are added and the wet-leased aircraft is returned.

Mango fleet: as of 4-Jul-2013


Source: CAPA Fleet Database

Mango added the wet-leased aircraft following the Nov-2012 suspension of services at 1time. The aircraft was used to launch services on 5-Dec-2012 to Port Elizabeth from Cape Town and Johannesburg OR Tambo International Airport. Port Elizabeth, which had been served by 1time, became the sixth airport and fifth city in Mango’s scheduled network.

Mango’s network: as of 4-Jul-2013


Source: CAPA – Centre for Aviation & Innovata

Mango expands as 1time exits

Mango also has been able to boost capacity on several existing routes after dry-leasing a sixth 737-800. Mango in Jun-2013 offered about 48,000 weekly seats in South Africa’s domestic market, representing about a 40% increase compared to Jun-2012, according to CAPA and Innovata data.

The biggest capacity increase has occurred on Cape Town-Durban, where Mango has added nine weekly frequencies for a total of 30. 1time operated two to three daily flights between Cape Town and Durban. The SAA codeshare has helped Mango grow the market as SAA has not up-gauged from using 50-seat regional jets on its 18 weekly flights between Cape Town and Durban. Kulula also has not expanded beyond its one daily 737 frequency although Comair has expanded in the Cape Town-Durban market over the last year through its full-service British Airways brand, which currently provides 23 weekly 737 frequencies.

Mango now accounts for 51% of seat capacity in the Cape Town-Durban market, compared to 36% one year ago. 1time had a 25% share in Jul-2012. Cape Town-Durban is the only Mango route in which the carrier accounts for over 50% of capacity.

Cape Town to Durban capacity by carrier (one-way seats per week): 19-Sep-2011 to 22-Dec-2013


Source: CAPA – Centre for Aviation & Innovata
Note: Comair-listed capacity is operated under the Kulula brand. British Airways-listed capacity is also operated by Comair under a franchise agreement with BA.

Cape Town-Durban is now Mango’s third largest market after Johannesburg OR Tambo-Cape Town and Johannesburg OR Tambo-Durban. Mango currently operates 33 weekly return flights from Johannesburg OR Tambo to both Cape Town and Durban. Mango currently has a 13% share of seat capacity on Johannesburg OR Tambo-Cape Town and a 19% share on Johannesburg OR Tambo-Durban, according to CAPA and Innovata data.

Mango also offers 20 weekly flights from Johannesburg Lanseria to Cape Town. Port Elizabeth (PLZ) is currently served with one daily flight from Cape Town and four weekly flights from Johannesburg OR Tambo. Mango’s only other route, Cape Town-Bloemfontein (CPT-BFN), is served with six weekly flights in each direction.

Mango routes ranked on one-way frequencies: 1-Jul-2013 to 7-Jul-2013


Source: CAPA – Centre for Aviation & Innovata

Rationality returns to South African domestic market

1time served all of Mango’s current routes except Cape Town-Bloemfontein. A fourth LCC, Velvet Sky, also served all three routes in South Africa’s 'Golden Triangle' of Johannesburg, Cape Town and Durban. Velvet Sky suspended operations in 1Q2012, just one year after its launch.

Prior to Velvet Sky’s exit, the South African domestic market consisted of about 360,000 weekly seats, including about 250,000 in the Golden Triangle. Capacity is now at a more rationale 320,000 seat level.

South Africa domestic capacity by carrier (seat per week): 19-Sep-2011 to 22-Dec-2013


Source: CAPA – Centre for Aviation & Innovata
Note: Comair-listed capacity is operated under the Kulula brand. British Airways-listed capacity is also operated by Comair under a franchise agreement with BA.

Mango currently accounts for about 15% of domestic capacity in South Africa while LCC rival Kulula accounts for about 25%, according to CAPA and Innovata data. SAA accounts for a leading 45% of domestic capacity, including flights operated by its regional partners, while the British Airways brand accounts for the remaining 15%.

South Africa domestic capacity share (% of seats) by carrier: 1-Jul-2013 to 7-Jul-2013


Source: CAPA – Centre for Aviation & Innovata
Note: Comair-listed capacity is operated under the Kulula brand. British Airways-listed capacity is also operated by Comair under a franchise agreement with BA.

Mango and Kulula both have seen their market share increase but the total LCC penetration rate has decreased as a result of the exit of 1time and Velvet Sky. In early 2012 LCCs accounted for 46% of capacity in South Africa’s domestic market, including 18% for Kulula, 13% for 1time, 10% for Mango and 5% for Velvet Sky.

A third LCC could struggle given limited size of South Africa’s domestic market

While there is potential for rapid domestic growth in the medium to long term, the South African domestic market is not of the size where it can support four LCCs. Even sustaining three LCCs over the long term is questionable.

Countries with similarly sized domestic markets include Chile, New Zealand, Norway, Saudi Arabia and Vietnam. The domestic markets in New Zealand, Norway and Saudi Arabia are currently only served by one LCC. Vietnam is the only other market with two LCCs while Chile has the distinction of having the second largest domestic market in the world after Russia without any LCC service.

As a result pan-African LCC group fastjet will face challenges in trying to establish a presence in South Africa’s domestic market as a planned third LCC. fastjet has been seeking to enter the market since 1time’s collapse. fastjet initially looked at taking over 1time’s operator certificate but shifted gears in May-2013 to establishing a joint venture carrier in partnership with a South African investment company and a South African charter carrier. But plans to launch the South African affiliate in mid-2013 were put on hold recently as fastjet decided to instead focus for now on launching international operations from its original base in Tanzania.

See related reports:
•fastjet plans first international route, delays South African domestic launch
•fastjet LCC seeks rapid South African market entry by foregoing JV control to Fastjet Holdings
•South African Airways and Comair could face new LCC competitor following demise of 1time

fastjet is still planning to eventually establish a domestic operation in South Africa. But the repeated delays and postponements gives Mango and Kulula a further advantage as they have more time to cement their positions in the market. Both brands are strong and have first mover advantage over any third LCC which enters the market.

Mango returns to the black with ‘very good’ FY2013

While Mango and Kulula have the muscle to fight back at any new entrant, inevitably the intense competition that will result from the launch of fastjet or any other start-up will impact profitability.

Mango was back in the black in the fiscal year ending 31-Mar-2013 after two consecutive years in the red. The carrier does not release financials but parent SAA acknowledged unspecified losses at Mango in their annual reports for FY2011 and FY2012, following small profits in FY2009 and FY2010.

SAA has not yet reported its results for FY2013 but Mr Bezuidenhout told CAPA it was “a very good year for Mango” and unit revenues were up 39% compared to FY2012. He added: “I would like to say that not everything was fundamentally due to 1time’s exit. Last year was a good year yes because, one, there was an exit in the market but, two, our on-board internet access got well adopted and, three, we expanded before 1time’s exit.”

Mango became in 2012 the first South African carrier to offer on-board internet access, which it believes gives it an important competitive advantage. The internet product has been particularly beneficial for Mango as all installation costs were covered by partners.

Mango to stick with 737-800 until about 2020

Mango is now investing in retrofitting its aircraft with new interiors and seats. The carrier is comfortable with making this investment as it expects to operate its current fleet of 737-800s until about 2020, at which point it expects to transition to the 737MAX or A320neo. The carrier plans to soon start evaluating both new types.

Mango’s next two 737-800s are coming out of SAA's fleet, which is transitioning its narrowbody fleet to A320s. The carrier's last two and original four 737-800s also were previously operated by SAA.

While Mango could potentially grow its fleet to 16 aircraft if it takes all of the 737-800s being phased out by SAA it is not obligated to take ex-SAA aircraft as in most cases their leases are expiring. But so far Mango has been able to negotiate favourable lease rates with the owners of the aircraft, resulting in a significant reduction compared to what SAA had been paying. “We have to negotiate better rates. It’s as simple as that,” Mr Bezuidenhout said.

Mango has the right approach

Mango is relentlessly focused on keeping its costs low and well below SAA’s bloated levels. This is a key component of the multi-brand strategy as the SAA Group continues to use Mango to compete against LCCs and grow with a focus primarily on leisure markets – for now domestically and over time internationally.

Mr Bezuidenhout points out that in setting up Mango in 2006 the SAA Group was careful not to repeat the mistakes in Europe and North America, where full-service carriers established new LCCs as divisions rather than independent subsidiaries, resulting in cost structures which were too similar to their parents. SAA instead took the more successful Jetstar-type approach that been used in recent years across the Asia-Pacific region. While Mango was established two years after Qantas launched Jetstar, which is widely viewed as the first successful example of the multi-brand model, SAA should be credited with recognising at a very early stage the benefits that a budget subsidiary could bring under the right strategy.

While Mango has pursued very slow expansion until relatively recently, the foundation is there for a successful budget carrier subsidiary. Perhaps the biggest roadblock to future success is SAA itself, as the flag carrier attempts to implement yet another new strategic plan aimed at reversing several years of losses and failed restructurings.


http://centreforaviation.com/analysi...-growth-117288
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Old July 9th, 2013, 02:34 PM   #7
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International routes from Durban and Cape Town possibly on the agenda for Mango...

SAA low cost subsidiary Mango looks to international markets as competition with fastjet beckons



This is the second instalment in a two-part series of reports on South African Airways' (SAA) low-cost subsidiary Mango. The first report looked at Mango’s slow pace of expansion in the five years after its Nov-2006 launch and its improved outlook in the domestic market, where the carrier over the last year has begun pursuing faster growth. This report looks at the potential for Mango to operate international services from its South African base and launch new affiliates in other African countries, which would put Mango in competition with new pan-Africa LCC group fastjet.

Potential joint ventures or affiliates have always been part of Mango’s long-term plan. But just as it has been relatively conservative in the domestic market, Mango has been slow to expand in the international market – both organically and in establishing joint ventures.

Mango has not yet succeeded at establishing any joint ventures and has still not operated a single international scheduled flight. However, the carrier finally dipped its toe in the international market in Mar-2013, when it launched charter flights to Zanzibar in Tanzania. The service currently only operates once weekly but provides a foundation for Mango to grow in Tanzania, where the carrier aims to eventually operate scheduled flights to Zanzibar and Kilimanjaro.

SAA-fastjet battle begins with Dar es Salaam-Johannesburg market

Tanzania is a key market for Mango and its parent SAA as it is the initial home market for fastjet. The new LCC group launched domestic services in Tanzania in Nov-2012 and recently secured approval to launch international flights from Tanzania to three countries including South Africa.

The approvals came after a lengthy and costly battle by fastjet Tanzania, which initially expected to begin international services shortly after its domestic launch. The carrier, which currently operates a fleet of three A319s, is expected to soon set launch dates for services from its Dar es Salaam base to Johannesburg, Kigali in Rwanda and Lusaka in Zambia. As fastjet turns attention to finally launching international services, it has postponed plans to launch a South African affiliate, which originally aimed to launch domestic services in Jul-2013.

See related reports:
•fastjet plans first international route, delays South African domestic launch
•fastjet posts USD56 million loss but remains optimistic about African success
•fastjet pushed ahead with African expansion in 2013, but faces protectionist hurdles

As analysed in the first report in this two-part series, the launch postponement of fastjet South Africa gives Mango and South Africa’s other remaining LCC, Kulula, more time to prepare for increased competition and cement their already strong position in the South African domestic market.

See related report: South Africa's Mango, the often forgotten budget subsidiary, starts to pursue faster growth

But the SAA Group is not entirely escaping competition with fastjet as SAA is currently the only carrier on the Dar es Salaam-Johannesburg route. Like most of its other intra-Africa routes, Dar es Salaam-Johannesburg is highly profitable for SAA with one-way fares starting at about USD400.

Dar es Salaam will be the first of potentially several international markets that SAA will see new low-cost competition from fastjet. As the group launches new affiliates throughout Africa, Johannesburg will be a logical destination, allowing fastjet to leverage its presence in several markets and start connecting the dots in its planned pan-African network. International services are also a possibility for fastjet’s planned South African joint venture, assuming it launches, although the focus at least initially will be on the domestic market.

SAA to use Mango to open new international routes starting with Kilimanjaro and Zanzibar

With Mango, SAA has an option for responding to the prospect of LCC competition on some of its most lucrative international routes. But at least for now the SAA Group strategy is to use Mango to open new leisure-focused international routes rather than have Mango operate alongside SAA like it does on six of Mango’s seven domestic routes.

As a result Mango is targeting the secondary Tanzanian cities of Kilimanjaro and Zanzibar and has no intention of serving the capital Dar es Salaam. “Our path to market starts off as leisure as a leisure-based carrier regionally,” Mango CEO Nico Bezuidenhout told CAPA recently. “We are always conscious of cannibalisation. There are some routes as a single shareholder as the SAA group it doesn’t make sense for Mango to enter.”

Having Mango enter the Johannesburg-Dar es Salaam route would be risky at it would likely lead to over-capacity and intense competition, impacting SAA as well as fastjet. But ultimately it could be a response SAA turns to depending on fastjet’s success in the market.

SAA at least initially will stick to its full-service product and try to leverage the advantage it has as a network carrier and member of the Star Alliance, which allows it to offer a wide array of connections and the option of a premium cabin. But SAA will likely have to match fastjet’s lower fares on some seats to retain price conscious point-to-point passengers and could eventually look at bringing in Mango should the battle prove to be challenging.

SAA has previously successfully fought off competition in the Dar es Salaam-Johannesburg market. Air Tanzania, Tanzania’s Precision Air Services and South Africa’s Comair have all previously served the route. Precision, which is partly owned by Kenya Airways, dropped the route in Oct-2012 while Comair exited in Aug-2011, less than a year after launching services to Dar es Salaam. fastjet will be a completely different type of competitor as Comair operated the route under the full-service British Airways brand and not under LCC subsidiary Kulula. But the repeated failure of carriers attempting to compete against SAA on the route highlights the challenges confronting fastjet.

Mango is more likely to eventually compete against fastjet in the smaller and more leisure-focused Kilimanjaro-Johannesburg and Zanzibar-Johannesburg markets. fastjet already operates domestic services to Kilimanjaro and Zanzibar, making them logical candidates for potential international services.

The Johannesburg-Zanzibar route was one of three international routes served by South African LCC 1time when it suspended services in Nov-2012. Mango has only filled a portion of the void left in the Zanzibar market by 1time as 1time was serving the market with three weekly flights. If Mango upgrades its Zanzibar service from the current one weekly charter flight to a more frequent scheduled flight it could make it difficult for fastjet to also enter the market.

If fastjet does enter, Mango will likely also have the advantage of offering connecting itineraries to and from Zanzibar as it already codeshares with SAA. The codeshare is now limited to two domestic routes but could be extended to international routes, particularly as Mango is expected to serve international routes which are not served by SAA.

South Africa to Tanzania capacity by carrier (one-way seats per week): 19-Sep-2011 to 22-Dec-2013


Source: CAPA – Centre for Aviation & Innovata
Note: Mango currently operates to Tanzania on a charter basis only. fastjet capacity not yet displayed because it has not yet set a launch date or schedule for the recently approved Dar es Salaam-Johannesburg route

Kilimanjaro is not currently served by any carrier from Johannesburg. But Kilimanjaro is a popular tourist destination that is currently served by eight foreign carriers, according to Innovata data.

Mango has several potential international routes

Mango also has been looking at serving Mauritius, the only route it currently has traffic rights to serve with scheduled flights. Mauritius is currently served from Johannesburg by SAA, Air Mauritius and Comair under the BA banner. Air Mauritius is the only carrier currently serving the Mauritius-Cape Town and Mauritius-Durban routes.

Serving Mauritius from Cape Town and Durban would fit Mango’s strategy of avoiding duplication with SAA’s international network. But Mango could potentially take over SAA’s daily service in the Johannesburg-Mauritius route given this is primarily a leisure route.

Mombasa in Kenya would be another possibility. Mombasa along with Zanzibar and Livingstone in Zambia were 1time’s three international markets. While the Johannesburg-Livingstone market is already served by SAA and Comair/BA, Mombasa is not currently linked with South Africa. Filling the void left by 1time in Mombasa while SAA continues to serve the Kenyan capital and financial centre Nairobi would be in line with the strategy intended for Tanzania, where SAA will continue to serve Dar es Salaam, leaving Mango to serve Zanzibar and Kilimanjaro.

Mango keen to establish joint ventures in other markets

While Mango will likely compete against fastjet on at least a few international routes to and from South Africa, the much bigger potential battle will come if both end up establishing affiliates in the same market. South Africa remains the obvious market for local competition between Mango and fastjet but the battle could easily spread to other African countries as Mango looks to follow fastjet in establishing a pan-African network.

Mango’s failure to establish any joint ventures in its first seven years means that Mango and SAA has ceded a potential first mover advantage in Africa’s undeveloped but promising LCC market. But in Africa being the first to take a stab at establishing a regional LCC group has its challenges, as the delays fastjet has encountered and losses fastjet has incurred in recent months can attest.

By waiting and watching fastjet attempt to overcome obstacles, Mango can learn from fastjet’s mistakes and piggyback on its pioneering groundwork in opening up new markets. “In some respects there is a first mover advantage to talk about. But on the other side you can say someone else seeds the market,” Mr Bezuidenhout said. “...South of the equator I know fastjet is active in some of these countries but there are challenges.”

Even if fastjet ultimately succeeds there will be room for multiple players given the vast size of Africa. Outside South Africa the LCC penetration rate in the intra-Africa market is virtually zero. Mango and Kulula currently account for 87% of LCC capacity within Africa and neither carrier currently has any scheduled international services.



The Fastjet Group now accounts for only 12% of LCC capacity within Africa. This includes the current fastjet Tanzania operation and the operation of sister carrier Fly540 Kenya but does not include other Fly540-branded operations. The Air Arabia Group accounts for the remaining 1%.

UAE-based Air Arabia has affiliates in Egypt and Morocco but Air Arabia Maroc currently only serves international destinations in Europe while Air Arabia Egypt has just one route within Africa, Alexandria-Khartoum. LCCs currently account for about 18% of seat capacity in North Africa, giving North Africa a much higher LCC penetration rate than any other part of the continent except South Arica. But this is driven by flights to Europe and the Middle East, with the lone exception of the three weekly Air Arabia Egypt flights to Khartoum in Sudan.

Central/Western Africa has a LCC penetration rate of approximately 1% while Eastern Africa has a LCC penetration rate of about 4%, according to CAPA and Innovata data. Fly540 Kenya became the first African LCC outside South Africa in 2006 and currently operates a fleet of regional jets and turboprops to seven domestic and eight international destinations, according to Innovata data.

Prior to its sale to fastjet in 2012, Fly540 attempted to establish affiliates in several other African countries but had limited success. In the 12 months ending May-2013 the Fastjet Group transported 837,000 passengers, including 169,000 at fastjet Tanzania and 669,000 at Fly540 Kenya, Fly540 Angola and Fly540 Ghana. This is less than half the number of passengers carried in the same period by Mango.

Mango has the potential to spread its wings but its success is far from guaranteed

While Mango has so far remained entirely focused on the domestic market, it is confident the model it has gradually built and tested in South Africa can easily be replicated throughout the continent. The carrier particularly is looking forward to leveraging its use of alternative distribution and payment options. Mango claims to have the widest distribution network in Africa, which could give it a competitive advantage as it expands internationally given that internet and credit card usage remains low in most African markets.

The biggest limitation facing Mango in its pursuit of a pan-African network could lie with its shareholder. As Mango and SAA remain government owned, a huge amount of red tape and bureaucracy would have to be overcome to secure approval for any overseas investments. Potential partners in other African countries may prefer to work with private companies such as fastjet. A completely government-owned LCC is almost unheard of in the global airline industry. Mango was a controversial creation from the beginning as South Africa’s private LCCs vehemently protested against the concept of a government-supported LCC distorting the playing field.

Mr Bezuidenhout acknowledges Mango’s ownership structure “makes it more challenging” to establish joint ventures in other African markets but is confident it can still be done. “We continue to look at it. We have invested heavily in integrating this entity and smoothing and improving the model. It would be a shame not to replicate it elsewhere in Africa,” he said.

Mango will have its challenges but if anything they will be less insurmountable than the mountain the struggling fastjet is now attempting to climb. Eventually LCCs will succeed at penetrating Africa. Mango may end up being in the right position at the right time.


http://centreforaviation.com/analysi...beckons-117520
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Old July 9th, 2013, 02:37 PM   #8
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Much of what is said about Mango in those two pieces makes alot of sense. They are not going to be tackling SAA head on in international routes, rather complimenting and flanking them. This could definately spell new routes to international destinations from Durban and Cape Town. They speak of Mauritius and i think that this would be a wise move as currently this is sole territory for Air Mauritius and a waiting money spinner. once a week would be enough to bolster the market with mauritius seemingly becoming a more important destination.
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Old August 19th, 2013, 11:01 AM   #9
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yeah!! as expected

Quote:
Breaking news: new scheduled services to George
19 Mon, Aug 2013

Mango is to commence scheduled services between Johannesburg and George, starting November 18. The flights have opened for booking today (August 19).

Flights between the cities will operate Fridays through to Mondays with an initial frequency of one daily air lift in either direction. Johannesburg George is the airline’s third new domestic route in the past twelve months.

For more details see tomorrow’s edition of eTNW
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Old June 4th, 2014, 02:55 PM   #10
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I flew on Mango for the first time ever this past weekend PLZ-CPT. The ground staff were great at their jobs, all procedures were seamless and fast. One thing that surprised me, is that the aircraft I flew on (both ways) wasn't a fully Mango branded plane. It was a very old and tired looking B733, and aside from the orange tail and the Juice Magazine in the seat pockets you'd never even know it was a Mango flight. I noticed that the flight was operated by Star Air. Pity they don't make their customers aware of this before the flight, as these flights do not offer the WiFi service, and if you bought this as an extra online, you will only find out you cant use it once you are on board.
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Old June 5th, 2014, 11:58 AM   #11
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Interesting. I thought they were a 737-800 only fleet
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Old June 6th, 2014, 02:57 PM   #12
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Interesting. I thought they were a 737-800 only fleet
Their own fleet is 738 only, but they must have leased in another aircraft to cover maintenance, or extra flights before they could acquire their own aircraft.

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Old June 7th, 2014, 10:29 AM   #13
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They have been using a single 737-300 operated by Star in a semi Mango colour scheme for several months. It has been used to open new thiner routes to Port Elizabeth and George and has also been seen in Bloemfontein. They have obviously found the smaller capacity 737-300 useful for the new routes.
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Old June 7th, 2014, 11:41 AM   #14
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makes sense, but it's not fully branded then because it's a short term lease?
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Old June 7th, 2014, 03:27 PM   #15
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makes sense, but it's not fully branded then because it's a short term lease?
Yes, it was a short term lease but they have kept it on longer than originally anticipated.
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Old October 7th, 2015, 11:23 AM   #16
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Mango eyes international expansion as new domestic route set to take off
2015-10-07 08:32 - Selene Brophy
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Cape Town - Mango's new Lanseria to Durban flight route is set to take off on 15 October but the low cost airline has confirmed that it has more plans for route expansions in the pipeline.

Hein Kaiser confirmed that Mango is looking at possible route expansions to Mauritius and Kilimanjaro, stating the airline is "exploring several routes, both domestic and regional, as the airline continues to seek growth".


Source http://traveller24.news24.com/Flight...e-off-20151007
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Old October 7th, 2015, 03:03 PM   #17
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While they're spreading the news regarding the new routes (like HLA-DUR) and increased frequencies (like JNB-PLZ and JNB-GRJ)...they ignore to mention that they're dropping CPT-PLZ from the same date (15 Oct).

Although it's not momentous and good news, at least the other carriers usually warn in advance and have press releases when dropping routes (usually a big explanation of competing against the state carriers blahblah...). The biggest two culprits in this however is SA Express and Mango, which quietly drops routes.
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Old October 9th, 2015, 09:57 PM   #18
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But isn't the quietly option the norm globally? Rah rah on launch and silently shut it.

Doesn't dropping CPT to PLZ affect seats massively? I guess it has become too over traded, in essence it's a good sign, new entrants chased an encumbent off a major route. And it's good that Mango then strengthen their core nodes, traffic to and from Durban being one they dominate. We don't need every carrier on every route, they all need to have strong hub areas rather than cover everything or we in for more closures
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Old June 13th, 2016, 02:59 PM   #19
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SAA bite at Mango CE could backfire
BY CAROL PATON, 13 JUNE 2016, 05:47

SOUTH African Airways (SAA) made the startling admission on Saturday that it subsidises low-cost state-owned airline Mango, by subleasing to its entire fleet at a significantly discounted cost.

The admission opens up Mango to action by the competition authorities, as low-cost competitors who have long suspected unfair competition are unlikely not to act on the national carrier’s statement.

SAA made the admission in the context of a statement on the resignation of Mango CE Nico Bezuidenhout, who announced on Friday that he was leaving to take up another opportunity.

The intention of the statement appears to have been a desire by SAA to tarnish Bezuidenhout’s reputation by implying that Mango’s success was not due to his managerial strength, but was rather due to the fact that SAA was subsidising the airline.

The statement says that, as "an initial investment to subsidise the start-up of Mango Airlines, SAA subleased 10 aircraft, at a significantly discounted cost to Mango Airlines, while continuing to pay the market related premium to the lessor."

"The aircraft are still in use and comprise the whole of Mango’s fleet. SAA understands and accepts that this is a necessary investment and a demonstration of shareholder support towards an entity it has exclusive shareholding over."

...The statement will be music to the ears of other low-cost airlines. Comair CE Erik Venter said on Sunday: "We raised the concern that SAA would subsidise Mango when it was launched in 2006, but for the past eight years, both SAA and Mango have vehemently defended the position that all interactions between SAA and Mango were on an arms-length basis.

"The admission that Mango has been subsidised, unfortunately, means that all three state-owned airlines operate at a loss and with state support. The implication is that new entrants into the airline industry will continue to face a significant barrier in the form of a competitor that can sustainably price its tickets at below operating cost," he said.

A prominent competition lawyer interviewed yesterday said that "at face value, this is a form of predatory pricing. It does appear that Mango may be charging prices that are lower than the costs that should be associated with those aircraft."

Should the competition authorities decide that the low-cost market is a distinct market, then Mango, as a dominant player could face penalties for predatory pricing.

The airline industry operates on tight margins, giving dominant players the advantage. SAA has previously faced unsuccessful litigation from Comair, which claimed that the government’s loan guarantees were not consistent with domestic aviation policy, which promises fair competition on free-market principles.

SAA is also at the centre of two damages claims, by Nationwide and Comair, which are claiming R35m and R1bn, respectively, for breaches of the Competition Act. Bezuidenhout has established a strong reputation in the industry and has acted as SAA CE for two separate stints, but has clashed repeatedly with SAA chairwoman Dudu Myeni and has been subjected to several probes aimed at proving misconduct.

One of the issues over which Myeni has been particularly aggrieved is the closure of the national airline’s Durban to Cape Town route, which the SAA statement says "hurt SAA’s commerical interest and financial performance".

The statement says that an investigation is still being conducted, and no conclusion has been reached.

The route was closed by former CE Sizwe Mzimela in 2010 for the heavy losses it was incurring. However, it has been often implied by Myeni that the real intention has been to provide Mango with additional commercial opportunities.

More here: http://www.bdlive.co.za/business/tra...could-backfire
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Old June 13th, 2016, 03:02 PM   #20
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Competition Commission must investigate SAA and Mango – Natasha Mazzone

Natasha Mazzone | 13 June 2016

DA says airliners cannot be allowed to undermine Treasury's calls for stringent spending

DA to refer SAA to Competition Commission for collusion with Mango

The DA will request that the Competition Commission launch a full-scale investigation into the alleged collusion between SAA and Mango Airliners that has seen the latter being able to offer drastically discounted flights through subleasing of aircraft at discounted rates by SAA.

This effectively means that both Mango and SAA have been losing money and that Mango’s “good story” is a farce paid for by the South African public.

We will ask the Commission to table its report in Parliament after including in their investigation:
- The benefits and possible kickbacks for SAA in leasing aircraft to Mango;
- The total cost to taxpayers due to this arrangement;
- The entire lease period and the terms of lease offered to Mango; and
- The total amount of losses to SAA attributed to the subleasing agreement.

In a statement on Saturday, SAA has confirmed and admitted after a near-decade of denials that it was assisting Mango through subleasing aircraft at discounted prices. This has allowed Mango to offer flight tickets at rates below operational cost. This is uncompetitive and detrimental to other airliners, who eventually will be priced out of the market and be forced into bankruptcy and closure. According to Comair, 10 out of the 11 independent, private airlines launched in South Africa since deregulation in 1991, have now failed, leaving only kulula.com and British Airways (both operated by Comair) remaining in our skies.

More here: http://www.politicsweb.co.za/politic...ate-saa-and-ma
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