Changes can still take place in the three international airline alliances that dominate the market and one under discussion now could make a big difference to both SAA and Nationwide. SAA is preparing to face stiff competition from US airline Delta, whose new service between Johannesburg and Atlanta by way of Dakar is due to start on Tuesday.
Delta's other new African route, between Accra and New York, is also expected to take West African passengers away from SAA. But US Airways, which, like SAA, is a member of the Star Alliance, has written to Delta proposing a merger. Delta is a founder member of the rival Sky Team alliance to which Air France and KLM Royal Dutch Airlines - both of which have a strong presence in Africa - belong. The merger invitation does not seem to be entirely welcome. Delta's reply, that it would consider the offer, also mentions that it is achieving its goal of trading out of bankruptcy by February and aims at being "a proud stand-alone airline".
But if the merger does go through the new, huge, airline will have to decide which alliance to belong to. If it chooses the Star Alliance Delta will become an ally of SAA instead of a rival and presumably they would resume their codeshare arrangements to Atlanta that worked extremely well when it was SAA flying the route carrying Delta passengers. But if it chooses the Sky Team alliance, which already includes Continental and North West Airlines, it will be able to offer passengers an even larger number of destinations in the US, while the Star Alliance will have only one US partner - United Airlines.That would be splendid news for Nationwide, which has just become a codeshare partner of Delta, carrying its passengers on domestic routes in South Africa and to Livingstone in Zambia and hopes to become an associate member of Sky Team with codeshare arrangements enabling it to sell tickets on Delta's US routes.
Meanwhile Emirates Airline, which flies twice a day between Dubai and Johannesburg, has been given air traffic rights to put on four more flights a week. This news is not altogether surprising in view of the fact that the government has decided to encourage more international flights bringing tourists, and Nakheel Hotels and Resorts, the Dubai-based company investing more than R7-billion in the Victoria and Alfred Waterfront, has complained that there are not enough incoming flights. Emirates tried three years ago to obtain more air traffic rights that would enable it to put on daily flights to Cape Town. But at that time it was refused them. Since then Qatar Airways has entered the South African market, flying four times a week to Cape Town and I suspect Emirates may be concerned that our seasonal market may not be able to sustain four flights a week between here and Dubai.
SAA's full service airline confirmed this week that it regards the low cost airline, Mango, which it started with a R100-million loan but which is run by separate management, as a competitor and has no intention of reducing the number of its own domestic flights to help create a market for the new airline. Its senior executives have always told me that it intends to keep its share of the top end of the economy class market and, of course, it would become less attractive to business class passengers if it cut the number of flights. Unless it reduces the number of flights it is more or less forced to continue making special offers on its website to avoid flying with some empty seats, on each of which it would be losing money, until the holiday rush starts in earnest. I have always had the impression that SAA's management were not enthusiastic about starting a low cost airline to compete with themselves, although consultants advised it. Meanwhile kulula.com claims that Mango is flying with passenger loads of only 50 percent.
But Mango was intended to enlarge the low cost market and it has sold thousands of tickets forward to Vodacom to use at competition prizes, so that situation may change. An independent survey carried out just before it was launched showed that it had attracted a lot of interest in Cape Town's coloured community, in particular. - Weekend Argus, Travel 2007
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