Mango to add 2 aircraft to its fleet but remains cautious about industry
21-Oct-2014 Low cost airline Mango CEO Nico Bezuidenhout announced that the carrier will add two additional new generation Boeing 737-800 aircraft to its fleet this year. The airline will operate 10 aircraft between 8 airports that represents capacity growth of 150% and network growth of 100% since its launch 8 years ago. The new aircraft will be deployed, one at a time, at the end of October and November across Mango's existing network.
Bezuidenhout says that new routes are in the offing, but likely during the next 6-8 months. "The domestic market is near saturation in terms of carriers while few routes remain available that we do not operate already." He adds that the airline is in the process of reviewing several regional destinations at this time with the likelihood of another East African seaboard route. "Domestically we are reviewing options too, but at present it makes competitive sense to bulk up on our existing schedule."
Mango's approach to growth has been consistently prudent, says Bezuidenhout. "In a market where capacity and demand are out of sync and competition extreme, our investment in continual research and strong business case considerations have paid dividends." Since its launch in 2006, Mango has been consistently profitable in 6 out of 7 full fiscals completed. The carrier has also invested substantially in access to affordable air lift services, paired with innovation; it now holds the largest distribution network of any airline in the country. Mango now carries more than 200 000 Guests every month.
Bezuidenhout also expects another start-up to enter the market before mid-2015. "The introduction of a second new airline in the domestic market will exhaust the sector," he says. "The market has contracted substantially since 2008 and, with margins under pressure again this year, it is a fact that the sector cannot sustain more capacity on obviously popular routes such as Johannesburg Cape Town and Johannesburg Durban." He adds that while below cost fares feed airline launches, it would be impossible to sustain. "The environment pre- the global financial crisis proved far more conducive to airline startups. Today, given capital scarcity and increased competition, an investment proportionately greater as was required a couple of years ago may be necessary to sustain an airline well beyond its launch. Even with the lowest cost base in the industry, Mango's consistent profit history was not easily achieved."
Mango presently operates more than 40 flights daily between most of South Africa's major centres as well as twice weekly flights between Johannesburg and Zanzibar. It remains the only airline in Africa to offer on board Wi-Fi on the majority of its fleet and is also the only airline in the world that accepts store charge cards (Edgars/Jet) as payment method online and through its call centre and mobile apps. Mango was also recently awarded the Skytrax World Airline Award as Africa's Best Low Cost Airline.