1time

South African Airways hits a new low with the suspension of acting CEO Vuyisile Kona

Nearly four months after the mass resignation of the South African Airlines board over unwelcome government interference, followed soon after by the departure of its CEO and several senior executives, the carrier has plunged to new lows with the suspension of its acting CEO.

Vuyisile Kona was suspended from his job on 11-Feb-2013 while “certain allegations that have come to the attention of the board” are investigated.

CEO of SAA LCC subsidiary Mango, Nico Bezuidenhout, has taken over as interim CEO, the third head of the company since 2009. He will now lead the committee developing the strategic plan that is now due by the end of Mar-2013.

African airline start-ups hold the key to unlocking the continent’s riches

Africa’s potentially rich aviation pickings are attracting a new breed of start-ups. Some, like Starbow and FastJet, have ambitions to develop pan-African networks through franchise models. Others, including Africa World Airlines and Korongo Airlines, are focused on their domestic markets and regional services to neighbouring states. Yet a third grouping, led by ECAir, have established inter-continental operations.

While several of the start-ups are backed by their respective governments, it is notable that the strongest contenders are either largely or wholly privately owned and funded.

This new generation of carrier could provide the answer to Africa’s lack of domestic and intra-continental air services by increasing route options, lowering fares and making air travel affordable to the growing middle class.

Aviation enjoys a natural advantage as a means of connecting cities, where most of Africa suffers from poor or non-existent ground transport infrastructure.

South African Airways needs more than a government bailout to pull it out of the financial mire

South African Airways bears all the scars of a government-owned legacy carrier in terminal decline, accelerated by continued political fumbling and interference which in Sep-2012 resulted in the mass board walkout and the resignation of three top executives, including its CEO.

The flag carrier is deeply mired in debt, bereft of a positive outlook. A temporary sop of a government guarantee is unlikely to support a turnaround in 2013 and offers little hope of improvement in South Africa’s troubled aviation sector while government fumbling continues. Moreover, subsidy of one airline – by providing government guarantees – in a supposedly deregulated domestic market only serves to destabilise competitive operations.

That does not offer a sustainable recipe for an airline industry in a country which relies heavily on dependable commercial air services to support economic activity. Yet, unless its masters in Pretoria miraculously gain, and apply, a clearer vision for SAA, the future promises only the continuing decline of a once proud airline.

South African Airways and Comair could face new LCC competitor following demise of 1Time

South Africa has lost two airlines this year with the collapse of low-cost carrier 1time on 02-Nov-2012 and short lived LCC start-up Velvet Sky in Mar-2012. The demise of the smaller carriers has in effect returned the South African domestic market to a duopoly of South African Airways and Comair and their respective subsidiaries.

SAA dominates the market with its main brand supported by LCC subsidiary Mango and regional subsidiary SA Express. Comair operates a full-service British Airways franchise and competes in the LCC market with its Kulula brand. The two groups probably have until about the middle of 2013 to consolidate their positions in anticipation of an inevitable new entrant, likely to come from former 1time executives who appear to be planning to launch new LCC Skywise early in 2013.

Air China tops airline Enterprise Value rankings; Delta second; no LCCs in top 10

It would appear China has already reached its aim of creating a world-beating "super carrier" – at least in terms of financial size. Air China is by far the world’s biggest airline, based on a current ranking of listed airlines’ Enterprise Values (EV) assembled by the Centre for Asia Pacific Aviation (CAPA).