Thursday, 24 January 2013

Fastjet hits foreign ownership hurdle in South Africa

Fastjet is holding top-level talks with the South African government after several domestic carriers moved to block its acquisition of 1time Airline, citing foreign ownership rules.

The startup African low-cost carrier, which is backed by EasyJet founder Stelios Haji-Ioannou, had signed an option agreement to acquire South Africa's 1time in December 2012, one month after the latter entered provisional liquidation.

Fastjet had planned to resume operating "up to three" of 1time's 12 Boeing MD-80s if the deal could be finalised, as well as reinstating hundreds of employees. The 1time brand would then be phased out as Fastjet aircraft came on stream.

However, it emerged on 23 January that at least three local carriers - state-owned South African Airways (SAA); its low-cost subsidiary Mango; and British Airways affiliate Comair - are now pressuring South Africa's Air Services Licensing Council (ASLC) to block the acquisition.

Tuesday, 1 January 2013

GACA slams on the brakes

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page 46/47 & page 48

The recent decision by GACA, Saudi Arabia's civil aviation authority, to delay awarding new domestic air licences came as little surprise to people familiar with the kingdom's heavily regulated, duopolistic market. The much-vaunted liberalisation process had advanced as far seven bidders being shortlisted - among them consortia comprising Gulf Air, Bahrain Air and Qatar Airways - but it became clear that the familiar stumbling block of regulatory price intervention was hindering a deal.

"GACA needs more time to choose the best operating models after it completes the analysis and evaluation of the bids that were received from the companies," the authority said in late November, making no reference to the widely reported withdrawal of several bids in protest at the country's domestic fare cap. Earlier that month, GACA had insisted it was in the final stages of issuing the licences...

Ten times too many

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The collapse of South Africa’s 1time Airline in November 2012 was first and foremost a tragedy for the 1,000 employees it left jobless, few of whom can expect to be reinstated permanently if newcomer FastJet completes its proposed takeover of the defunct carrier. In an emotive statement announcing the failure of the business rescue plan, chief executive Blacky Komani spoke of the “end of a dream and an era for all of us”.

But, looking beyond the human toll of the low-cost carrier’s (LCC) failure, the South African media has been quick to ask why 10 of the 11 independent airlines created since deregulation in1991 have collapsed...

FastJet answers the low-cost call

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With the low-cost carrier (LCC) market transforming how Europeans think about air travel in the space of just two decades, it is little wonder that Stelios Haji-Ioannou, the founder of EasyJet, has been keen to export his philosophy to other corners of the globe.

Drawing inspiration from EasyJet’s brand name – not to mention headhunting several of its former executives and even leasing one of its old aircraft – the Greek Cypriot tycoon’s vision became reality in November 2012, when the inaugural FastJet flight took off from the Tanzanian capital Dar es Salaam to the northern city of Mwanza...

Friday, 21 December 2012

Turkish delights

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Though clearly not welcome news for Boeing, the decision by former customer Pegasus, Turkey's fast-expanding low-cost carrier, to select the Airbus A320neo for its fleet renewal—spurning the Boeing 737 MAX—will be neither surprising nor unduly alarming. True, Airbus has notched up 1,654 firm orders for the neo against 969 for the MAX. But Airbus had a nine-month head-start with its next-generation narrow-body aircraft. Looking at total orders across all types, Boeing is on track to outsell Airbus this year: the first time it has done so since 2006.

What is more interesting is the size of Pegasus's commitment—100 aircraft, comprising firm orders for 58 A320neos and 17 larger A321neos, plus 25 options. The airline's chairman, Ali Sabanci, describes it as "the biggest order in the history of Turkish civil aviation", which is no mean feat given the spending spree Turkey's flag-carrier has also embarked on...

Friday, 14 December 2012

Virgin and Delta: A heap of unanswered questions

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It may be coming late to the consolidation party, but Virgin Atlantic is confident that its new partnership with Delta Air Lines will deliver the same benefits that rival carriers have drawn from their "metal neutral" alliances. Quantifying the value of such alliances—where two or more airlines share revenue, and collaborate through cost-cutting and marketing initiatives—is tricky, but in the case of British Airways (BA) and American Airlines, which joined forces in 2010, it is clear that their combined 57% share of capacity between London Heathrow and America amounts to a giant slice of the transatlantic pie...

Wednesday, 12 December 2012

Interview: Thomas Wazinski, Gambia Bird CEO

Gambia Bird pins hopes on Nigerian progress

Gambia Bird is close to completing the first phase of its route roll-out, chief executive Thomas Wazinski tells Flightglobal, though the delay in launching Lagos flights has resulted in lower-than-expected average load factors on intra-African routes. While the fleet is unlikely to expand beyond two Airbus A319s in the near-term, he says neighbouring states have already approached the airline about possible alliances.

West Africa's newest flag carrier launched services on 22 October, initially connecting the Gambian capital Banjul with Dakar, Freetown, Conakry, Accra and Monrovia. Intercontinental services to London Gatwick and Barcelona followed shortly after, but flights to Lagos have been postponed for unspecified political reasons.

Saturday, 1 December 2012

Air Arabia spreading wings

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When Air Arabia was founded in 2003, the low-cost carrier (LCC) model pioneered by European airlines such as Ryanair and EasyJet was practically unheard of in the Middle East.

But in less than a decade, the Sharjah-based carrier has grown to serve more than 80 destinations with a fleet of 26 Airbus A320s. Though handicapped by heavily regulated skies, Air Arabia's dual focus on under-served eastern European markets and labour corridors with the Indian subcontinent is bearing fruit...

Friday, 30 November 2012

How Fastjet is refining the LCC model for Africa

Fastjet, the new pan-African low-cost carrier (LCC) which launched operations in Tanzania this week, has a stated goal of "democratising" air travel on the continent by introducing affordable, reliable and safe no-frills flights. Rather than taking market share from existing regional carriers like Precision Air and Air Uganda, its business model has the grander aspiration of catalysing a regional LCC boom and enticing Africans away from road travel.

In pursuit of this goal, Fastjet has no qualms about adopting core LCC principles in its business model - charging passengers for non-essential, ancillary services such as baggage and on-board refreshments. But at the same time, it has identified areas where the European LCC model is not well suited to the African marketplace, necessitating some refinement. In the words of chief commercial officer Richard Bodin: "We have to adapt and mould the model to fit the environment, culture, market [and] distribution channels."

Wednesday, 7 November 2012

Interview: Nico Bezuidenhout, Mango CEO

Mango spies east African expansion within 12 months

Mango, the low-cost subsidiary of South African Airways (SAA), expects to launch its first regional services within 12 months, chief executive Nico Bezuidenhout tells Flightglobal. The domestic carrier has secured rights for Mauritius and is close to gaining access to Zanzibar, Tanzania.

It had been planning to increase its six-strong Boeing 737-800 fleet by two aircraft over the next year, but that figure will likely rise in the wake of rival 1time's demise.

Bezuidenhout says the launch of pan-African low-cost carrier FastJet has placed a "competitive necessity" on Mango to "more aggressively pursue regional expansion".