Aviation Thread [Part 5]

[juzzy]

i think its a given Switch... now just the wait till announcement

[dysan1]

Originally Posted by Armchair

You might want to check that statement again...

Comair flights Mon thru Fri. (BA6310 & BA6309 added from 15 Dec 2010)

BA6300 DUR CPT 06:25 08:35 MN 0
BA6310 DUR CPT 10:45 12:55 MN 0
BA6312 DUR CPT 14:30 16:40 MN 0
BA6306 DUR CPT 18:00 20:10 MN 0


BA6301 CPT DUR 06:30 08:25 MN 0
BA6311 CPT DUR 09:15 11:10 MN 0
BA6309 CPT DUR 13:30 15:25 MN 0
BA6313 CPT DUR 17:30 19:25 MN 0

I apologise, but 6pm is still ridiculously early

[Ron2K]

SAA had flights departing at 19:00 and arriving at 21:00 - were full whenever I used them. Of course, they don't exist any more.

[dysan1]

Originally Posted by juzzy

i think its a given Switch... now just the wait till announcement

i would not be so sure. they struggling in Joburg

[juzzy]

Originally Posted by dysan1

i would not be so sure. they struggling in Joburg

hence the DUR add on

[Ron2K]

News doing the rounds on Avcom is that SAX will be picking up the DUR-CPT route next year. Here's the post.

[dysan1]

Interesting to see. If this is in addition to the mango flights then there will be great frequency on the route from jan. Smaller plane but flights every two hours is fantastic. The crj200 carries 50 people and the crj700 70 people. This could be as very good move by sax

[dysan1]

From todays Financial Mail

South African Airways - on the up?
Plane talkers
David Furlonger
Thursday, 2 Dec 2010

After years of scandals and unnecessary management diversions, SAA’s new leadership says it’s time to concentrate on the core business and turn the airline into a sustainable enterprise

It was a familiar situation. I was in a group of 15 people checking in at Cape Town International two Fridays ago for our late-afternoon SA Airways return flight to Johannesburg.

Despite arriving just over an hour before departure, we were told the flight was over booked and that we were among 30 passengers who would have to take later flights.

But when? The next SAA flight was also full. And the one after that. In the pre weekend rush, other airlines were unable to help. One of our party had to catch an international connection at OR Tambo. What could we do? SAA staff shrugged their shoulders. It wasn’t their problem. We were on our own.

Eventually, after much arguing, and a confrontation between a passenger and an airline official who said he was overdue for his tea break, our party was scattered among later flights. As a result, no doubt passengers booked on these were prevented from travelling.

Deliberate overbooking to counter the financial effect of “no-show” passengers (why shouldn’t they forfeit their money, like hotel guests?) is a hateful practice but one that is rife among airlines. It’s how airlines deal with it that defines them. On this occasion, as so often, SAA did itself no favours.

SAA chair Cheryl Carolus pinpoints staff training as pivotal to SAA’s renaissance. The airline has made too much use of labour brokers. “Temporary staff are not good for customer satisfaction. That comes from pride and joy and security and quality control. Airline travel is frustrating enough as it is. You don’t need bad experiences to make it even worse. There will always be delays and over booking but, if we keep people informed and do our best to help, it reduces resentment.”

Despite winning countless international airline awards, SAA is no stranger to resentment. CEO Siza Mzimela, who took charge in April, says ruefully: “When someone mentions Virgin or Emirates, people say, ‘What a good airline’. But when the name SAA comes up, the reaction is often: ‘Oh dear, what have they done now?’”

Not without reason. SAA is embroiled with the competition commission over allegations of price collusion. It has previously been fined heavily for unfair competition. There have been strikes and shortages of key staff. The airline even failed to pay bills from suppliers, threatening their future.

A number of Mzimela’s predecessors are known more for extraneous activities than their management of the airline. American former CEO Coleman Andrews left with a R232m golden handshake in 2001, the same year the airline posted a R700m loss. And Khaya Ngqula, who was fired in 2008, is being sued for R37m after an independent audit by KPMG found evidence of wasteful and fruitless expenditure on retention bonuses and sports sponsorships.

Carolus says: “We took the investigation as far as we could. Now it’s in the hands of the courts.” Other SAA staff may also face further disciplinary proceedings. “We continue to find things that were bad management. There has been some wilful wrongdoing, some cavalier activities and some grey areas.”

One might ask what the board and sole shareholder, the SA government, were doing while all this was going on. Having a shareholder with an eternal willingness to underwrite losses was no inducement to financial and strategic accountability. Carolus is reluctant to talk about previous boards, though it is clear oversight was lacking. “I’m prepared to put my head on a block and say 90% of the things uncovered in the KPMG report would not have happened if there had been proper governance.”

Like Carolus, who has a reputation as a no-nonsense businesswoman, current board members such as JSE CEO Russell Loubser and Shell SA chairman Bonang Mohale are unlikely to make the same mistake.

Mzimela shares a similarly straightforward attitude. She also has the advantage, unlike some previous CEOs, of knowing the airline industry. Her initial eight years at SAA included responsibility for many of its operational activities. Appointed to head SA Express in 2003, she inherited an airline that was technically insolvent. She handed it back this year in relatively rude health.

That’s good news for government which, says Carolus, has made it clear it will no longer be “blackmailed” into bailing out SAA. “That doesn’t mean it won’t provide funding. But there is a difference between capitalisation and bail out. Previous managements have gone to government saying, ‘We will go bankrupt if you don’t bail us out.’ That’s putting a gun to government’s head. That won’t happen in future.”

She adds that in its constant need for bail outs, SAA behaved “like an unrehabilitated alcoholic. Every time you say it’s the last time, and then, before you know it, you are back in the shebeen.”

Carolus says there is a “refreshing” government attitude now towards SAA. That even applies to the “P” word: privatisation. The debate is not an immediate priority but, she says: “We have been discussing what is the best ownership of SAA and its subsidiaries. It is pleasing that the question no longer appears to be an ideological issue. Some people who argue for state ownership border on religious fanaticism. We have moved out of that space. Government’s view is now determined by what makes business sense.”

It would be naive to think the fanatics won’t reappear if the privatisation issue moves to the front of the queue. But it won’t be just yet. This year’s unexpected 45% increase in net profit, to R581m, was welcome but it will take many more years of growth before potential suitors are interested. British Airways is often held up as the model of airline privatisation but the process to get it into shape took eight years.

SAA is far from that stage. Combined, its two successive years of profit amount to exactly half the losses of the two previous years. The airline has a history of feast-and- famine results and, with the international aviation industry still struggling to recover fully from recession, SAA continues to operate in a difficult market.

The latest quarterly airline business confidence index from the International Air Transport Association (Iata) shows most airlines remain nervous about industry prospects in 2011. In September, Iata forecast 2010 industry profits of US$8,9bn, followed by $5,3bn next year.

SAA says passenger and cargo load factors are showing steady improvement but remain below ideal levels. Mzimela complains that competition is keeping passenger fares below economic rates.

Carolus says this year’s improvement in SAA profits was “an important psychological marker for SAA staff. It may have been still small in terms of where we have to go, but it was a huge confidence booster — a ‘Phew!’ moment for all of us. There is palpably better morale now people believe the improvement is sustainable.”

Ironically, it can be argued that the turnaround is the result of policies introduced by the disgraced Ngqula. Though airline operations head Chris Smyth was acting CEO for just over a year until Mzimela’s appointment, it was Ngqula’s initiatives that started the process. These initiatives included staff and management cuts, the sale of some divisions, and the decommissioning of unproductive aircraft. Carolus says: “None of us wants to downplay the contribution of those who were here before.”

The airline has managed to reduce long-term debt and improved its debt: equity ratio from 14:1 to 8:1. Mzimela says: “We are still far from where we should be. How many businesses would be able to operate on that? It has to be one of our big focuses.”

She is making no rash promises about results in the airline’s current financial year, to March 2011. “It will be difficult from a financial perspective,” she says. “Last year we were aided by a huge drop in fuel prices. We believe we are on track for another profit this year but the currency is not helping at the moment. We’re certainly not looking at another 45% increase.”

Even with profit margins hovering between 2% and 3% — barely a quarter of the 10% target set by Ngqula three years ago before the global recession wrecked the aviation market — Mzimela believes the airline has embarked on a long-term, sustainable profit path. As a result, she is confident SAA will not need government guarantees to get market funding for the 20 Airbus A320s due for delivery between 2013 and 2015.

Like Carolus, however, Mzimela says talk of privatisation and of “profitability at all costs” must take account of SA’s particular circumstances. Some foreign airlines flying to and from the country have taken up less than half their flight allocations. As national carrier, SAA has a responsibility to ensure the country’s travel needs are met. “I’m not saying an airline should be allowed to be a constant drain on resources but we are at the end of the southern hemisphere .”

To base everything on profits and automatically cut non performing routes would invite geographic and business isolation. That doesn’t mean the airline won’t take tough decisions. This month it scrapped flights between Durban and Cape Town after long-term losses and relinquished the route to low-cost subsidiary Mango.

Mzimela says there are no immediate plans to scrap other routes, or to change the current mix of inter continental destinations. Africa is another matter. She is anxious that the airline should increase flight frequencies and destinations across the continent.

The desire is not for reasons of African solidarity but for profit. SAA’s African routes are mostly high-load and high- profit. Carolus says: “A lot of SA companies are going into Africa so that’s where we should be looking. There’s also a huge future for tourism travel, which is often started by business travel.”

Long term, Mzimela wants Africa to account for half of SAA’s business. “I support the vision of SAA as an African airline with international reach.”

Whether through bilateral agreements or airline partnerships, she believes there are several African routes ripe for SAA. The immediate obstacle is that, several years after talks began on deregulating Africa’s skies, it still hasn’t happened. “We seem unwilling to open our markets to each other yet we are willing to open them to European airlines. I find it frustrating that there is not more regional co-operation.”

Part of the problem is the desire of developing countries to have their own airlines. It’s a source of national pride, even though a number have gone bankrupt in the past three years. Mzimela says: “I suppose if you are trying to build an airline, you will see SAA, Kenya Airways or EgyptAir as a threat. The problem starts with the idea that everyone should have their own airline.”

Carolus and Mzimela want the airline to draw a line under the scandals and under performance of the past and to be known purely for the quality of its service. “Everything that went wrong before was the result of bad leadership,” says Carolus. “The public must realise SAA is not peopled exclusively by skelms.”

Both say public criticism of the airline should be seen positively. According to Mzimela: “The reason people pay so much attention is because they feel they own it and they have high expectations.” Carolus adds: “South Africans set the bar high. That’s a good thing. I don’t think we want to set our bar to the lowest common denominator. We shouldn’t lower our expectations of anything in our country.”

However, she suggests a little less arrogance might not go amiss. SAA run-ins with competition authorities suggest a bullying attitude that does not sit well with the public.

“As the biggest, you define how business is done in the sector. If people fly with you, it must be because they want to, not because we have killed the competition. We need to be smarter instead of using a blunt instrument.”

Management and board members have been meeting in recent weeks to plot a formal long-term strategy. Officials expect to announce some of their plans within days.


http://www.fm.co.za/Article.aspx?id=128412

[dysan1]

Also from todays Financial Mail

Domestic airline industry - competitive environment
Change is in the air
Razina Munshi
Thursday, 2 Dec 2010

Low-cost carriers have altered the rules of domestic air travel but competition between carriers is hotting up


Mirroring global trends, SA’s airline industry is in the midst of profound structural change. Premium national airlines, like SA Airways (SAA), are losing more and more business to their no-frills rivals .

Europe’s airline industry underwent a shift even before the recession: budget airlines like RyanAir and easyJet have gained more ground, stealing market share from British Airways (BA), Air France-KLM and Lufthansa. That trend has spread to SA.

Locally, there is substantial movement from premium class to low-cost flights, says Rodney James, CEO of JSE-listed 1time . And, as with Europe, he believes the trend is not limited to the recession. “Travellers don’t see the value of paying too much for a ticket just to earn frequent flyer miles.”

1time’s market share is about 15%. Though the global industry contracted during 2009, 1time’s passenger numbers grew 12%. Growth is expected to come, in part, from more movement from premium to budget airlines.

Mango CEO Nico Bezuidenhout calls it a “fundamental shift in consumer consciousness”. Low-cost airlines benefit from conditions created in a recession, but this trend is likely to continue, even when the state of the economy improves. Bezuidenhout’s projections indicate that this new consumer behaviour will be a driver of growth in the low-cost sector.

This month, Mango took over all Durban to Cape Town flights from its parent SAA , a move interpreted as part of a strategy by the national carrier to exit the short-haul routes where it has lost market share.

Both James and Bezuidenhout expect business travel to also acquiesce to budget airlines. Analysts agree. “On a low-cost flight, it is increasingly difficult to determine what percentage of passengers are business travellers,” says one analyst. With the trend set to continue, it’s important the industry offers a combination of low-cost and premium travel.

JSE-listed Comair, which operates kulula and BA’s regional flights, appears to have done this efficiently . It has a single back office, which can shift passengers from one airline to the other, a feature that SAA and Mango have not taken advantage of.

Comair’s market share has risen from 25% to 37% over the past three years. Most of this growth has been from kulula, SA’s first budget airline, now ranked the second-biggest airline after SAA. A chunk of Comair’s growth has been at the privately owned Lanseria airport, where kulula has operated as the only commercial carrier for almost five years. Lanseria’s costs are substantially lower than airports managed by the Airports Company SA.

But that growth may have reached its peak. “Lanseria has a need for a new runway, without which it cannot cope with any new capacity,” says Comair joint CEO Gidon Novick. “We have asked them to construct one urgently.”

Lanseria’s popularity seems to have declined with the introduction of the Gautrain, which has made OR Tambo International a more attractive choice for commuters who live in and around Sandton, previously a strong market for Lanseria. But this hasn’t discouraged 1time, which expects talks with Lanseria to yield routes to that airport next year.

Novick also expects that within the next three to four years, a secondary airport may be introduced in Gauteng to serve passengers from Pretoria. Options are Wonderboom airport and military bases near Pretoria.

Kulula’s other advantage is its new fleet. New aircraft don’t have high maintenance requirements, they break down less often and are fuel-efficient, reducing costs significantly.

The analyst says the oil price drop in 2008 gave 1time, which operates the oldest fleet in the industry, relief. It flies expensive Boeing MDs. Mango, meanwhile, leases its Boeing 737-800s from SAA.

This year kulula leased three new Boeing 737-800 s, with a further two intended for 2011. After that, says Novick, eight aircraft, their own, will be phased in. Introducing new aircraft is risky if passenger volumes don’t keep up, but it will put the airline in a good position for growth.

All three executives expect the industry to fly more passengers during the holiday season, and on a sustainable basis, from next year. But airlines will also explore growth within Southern Africa.

Comair has operated in the region for decades, through its BA brand. It also has agreements that allow it to book flights with other airlines on the kulula system. Kulula operates on 14 routes, and will introduce a flight to Maputo next year.

“Africa will continue to be a focus. Routes are opening up, and our focus is now shifting even further north,” says Novick. This will take it beyond Southern Africa, into West and East Africa.

1time, however, will limit its growth to Southern African countries. “The low- cost model doesn’t really work for long flights,” argues James. “We need to fly as many flights in a day as possible, so that we can sell as many seats as possible.”

Its longest is a three- and-a-half hour flight to Zanzibar, which James says is far more than its usual limit of about two hours. It supports this by driving 1time’s holiday packages business in Zanzibar.

Airlines are also investing more in the business of leisure and business travel packages: holiday packages, car hire and hotel reservations.

For example, Comair’s travel division, though a small part of current revenue, is growing its profit margin . Novick says Comair intends to grow this share of the business. It also has a flight training programme run for other airlines in Rhodesfield, Johannesburg.

Comair’s net profit doubled to R107m the year to June, and earnings per share rose 21% to 22c. But Novick says at less than 5% its profit margins are poor relative to where the company could be. He says the company will target a margin of 10% over the next few years.

Short-haul premium flights may not bounce back to previous levels, but carriers will still have to fight to maintain and grow their share of the market. Maintaining business travellers will be their biggest challenge.

Bezuidenhout says value, rather than price alone will drive airline ticket purchases. “Within a low-cost milieu, this means on-time performance, service levels and quality of delivery.” Mango, which is four years old, is the most on-time domestic airline, he says.

No-frills airlines are generally reluctant to offer more services than they have to. But as consumers’ disposable income improves, and with high levels of competition in the sector, they may have to up their game.

1time’s model, says James, gives it an instant edge . It started as a low-cost operation, which allowed it to structure its business in line with low-cost principles — but so did kulula. James says 1time’ s cabin staff, for example, are paid per hour, which encourages work attendance. “We don’t have historic premium-class overheads. Other low-cost airlines were created as divisions of premium airlines, and they are already locked into a certain way of doing business,” he explains.

However, this model may not account for added-value, which some passengers still look for. The industry does appear to have shifted, and while this is good news for consumers, it does mean that competition between operators could reach fever-pitch.



http://www.fm.co.za/Article.aspx?id=128413

[dysan1]

the big question is - when will we start seeing regional flights from Cape Town and Durban? It surely cant be more than a year away

[SA BOY]

Both James and Bezuidenhout expect business travel to also acquiesce to budget airlines. Analysts agree. “On a low-cost flight, it is increasingly difficult to determine what percentage of passengers are business travellers,” says one analyst. With the trend set to continue, it’s important the industry offers a combination of low-cost and premium travel.

This Business man disagee's 10000% , LCC will not be an option for those who spend their lives travelling, I refuse to fly them and never will. I may be the odd one out but the abilty to work on aplane in a premium seat, have the benifits that goes with the higher priced ticket (lounge, fast track check , additioanl baggae etc) far out weigh the LCC benifits.Id even go so far as to say Id fly from DUR to JHB in business class so I could fly to Cape Town in Buisness class

[Armchair]

Originally Posted by SA BOY

Id even go so far as to say Id fly from DUR to JHB in business class so I could fly to Cape Town in Buisness class

Or you could fly on BA/Comair in business class Durban non-stop to Cape Town!

[dysan1]

Originally Posted by SA BOY

Both James and Bezuidenhout expect business travel to also acquiesce to budget airlines. Analysts agree. “On a low-cost flight, it is increasingly difficult to determine what percentage of passengers are business travellers,” says one analyst. With the trend set to continue, it’s important the industry offers a combination of low-cost and premium travel.

This Business man disagee's 10000% , LCC will not be an option for those who spend their lives travelling, I refuse to fly them and never will. I may be the odd one out but the abilty to work on aplane in a premium seat, have the benifits that goes with the higher priced ticket (lounge, fast track check , additioanl baggae etc) far out weigh the LCC benifits.Id even go so far as to say Id fly from DUR to JHB in business class so I could fly to Cape Town in Buisness class

No offence but thats rather old school. Alot of companies are enforcing "cheapest ticket purchase". Economy in SAA/BA is hardly different to economy in the other airlines (bar mango) and its a 50min flight, check the folks in Business Class and i gurantee that not more than one is doing any work. Its a classical excuse to use business (so i can work/be more productive), but it is in most cases an utter fallicy.

Business is almost entirely snob factor. And when companies need to tighten purses, as they should have been all along, that is the first to go. Yes there are benefits of business reasons on long haul flights, but for a 50min-2hour flight its a bit much.

[SA BOY]

dude you obvioulsy dont really travel for a job and if you do its been for like 5 min. Ive been doing 300 000 base tier miles a year for nearly 10 years, belive me its worth every penny.Im gold or platinium similtaniously on star alliance, one world and emirates. I think I know what Im talking about and im not old school, Im real buisness and this is how real business works.

Secondly DUR to CT is not 50min. Add in all below and its a 5 hr trip at least.

Thirdy we dont need to tighten purses and Ive earned my travel class, you clarly havent spent much time traveling. between the travel to airport, check in, waiting in the lounge, waiting at boarding, flying, waiting to clear immigratiom, travel to destination etc , every week, belive me the luxuaries are well worth it.

I dont sit and watch crap on the in flight, I work, Ill have 50 emails written which will be sent on arrival.

Most of my short haul are around the states and Asia and the quality between econ and bus is massive in most cases and depending on what airline and route you fly. I change routing to have a better seat or plane even if it means flying via somewhere else.

You need to speak from a position of experinece before you bring your commnets to the table

Please dont preach to me about this subject and for proof check how full busines is on every flight these days, Its the bread and butter of real airlines so its hardly a passing fad or an outdated business practice.

[dysan1]

I am not here to judge what you do. and i never said i had a problem with it on long flights, it does make sense. BUT i do agree that paying 6 times the price for a business class seat on a 1-2 hour flight does not make economic sense for any firm as you DO NOT get real tangible benefit.

Why are the number of people flying business class all over the world falling? why are airlines cutting out First? why did business only airlines all but disappear? Go chat with the big airline monitoring agencies. Heck my firm is even putting time limits on flight journeys for when you qualify for a business class seat.

I clearly have not spent much time travelling? while i might not be in your league, i have done over 60 flights this year, the vast majority for business and i am a gold star alliance member too - but thats nothing to do with the point of what i have raised.

And yes you might work, but as i said in my other post, the VAST majority of people do not, companies are picking up on this and taking action on it. I know of at least 3 friends in very good jobs in the UK whose multinational companies refuse business class travel to anyone below the top directors.

So this might not be YOUR reality, but you are a sample of one and henceforth not representative of societies changes.

[SA BOY]

dude business figures are up over 15% on most major airlines, check your facts, Its the real money makers for airlines and buisness travellers

I am a director and shareholder hense I have earned this privelage.

I dont think your condesending tone that its old school and compaines must tighten belts etc is warrented. Maybe for your company but not for global firms, hell its even written into my contract as a condition of contract.

A;lso ytour agrumenst that you dont see people working in buisness class shows your inexperiance in the corporate world, Its not about working on the plane, but a nice ride half way around the world and walking straight into a meeting and being on your game and then leaving strainght afterwards for the return trip. Its all about real productivity to someone being billed or worth $1000hr to a firm not some some junior worker travelling domestically a couple of times a year.

To you it may be snob factor but thats cos you are not in the front like us real business folk.....hense the name business class!!!!

[dysan1]

I do work for a global firm. Let's just agree to view this differently. You are selectively reading what I wrote and arguing off on a tangent. I never said any of what you are going off on. I clearly stated over and over that I am refering to business class on short domestic flights not the long continental ones you are going off on. And to say global companies are not servely cutting back on this again because you aren't is not reflective of the travel restrictions the majority of firms are implementing. I have no more to say on this

[dysan1]

Confirmation...

SA Express flies CPT-DBN
Mon, 06 Dec 2010 8:13


South African Airways' loss is will be SA Express' gain, as the regional airline plans to launch flights between Durban and Cape Town from January 10, 2011. The announcement follows Comair’s announcement last week to increase flights on the route.

According to SA Tourism Update, the airline will operate a minimum of three flights per day during the week and two return flights each day on weekends. The flights will be operated with a 50-seater CRJ-200 aircraft.

For more information and to book, visit www.flyexpress.aero.



I gather this is the precursor to the arrival of the CRJ700 70 seaters on the route when we will have 6 daily return flights - good news from a frequency perspective. lets await the pricing though

[juzzy]

According to a source at Emirates. CPT is on the shortlist for the A380 for the 2011/2012 operating plan on EK 770/1...

[evanb]

Originally Posted by juzzy

According to a source at Emirates. CPT is on the shortlist for the A380 for the 2011/2012 operating plan on EK 770/1...

Unfortunately this is not true since CPT is not A380 ready and there are no immediate plans to make it so!