SAA to benefit as Air Zimbabwe faces bankruptcy

Workers at Air Zimbabwe have successfully won a high court application to have the airline placed under judicial management, which will now see its affairs handled by a judicial manager, Innocent Mavhunga, and not the airline’s board.

South African Airways (SAA) and Emirates are set to cash in on the woes that have gripped Zimbabwe’s state-owned airline, Air Zimbabwe, which yesterday was placed under judicial management because of a $140m debt.

Workers at the embattled airline successfully won a high court application to have the airline placed under judicial management, which will now see its affairs handled by a judicial manager, Innocent Mavhunga, and not the Air Zimbabwe board.

At the heart of the court intervention is a salary dispute between Air Zimbabwe and its workers, who claim to be owed more than $35m in outstanding salaries since June 2009.

Caleb Mucheche, a lawyer for the workers’ union, said: "Since the court has appointed a judicial manager it means this is a prelude to liquidation. The judicial manager will now move in and the current Air Zimbabwe board will have to step aside.

"The judicial manager will assess if Air Zimbabwe is still a viable entity, but as the way things stand, all is not well, and he is likely to recommend liquidation. That is the process. Whenever a judicial manager comes in, the next step is liquidation," Mr Mucheche said.

Air Zimbabwe has had to suspend several international and regional flights to Johannesburg and  London as its debt crisis ballooned and saw its flagship Boeing aircraft seized by creditors for nonpayment of services.

The threat of liquidation is certain to work in favour of SAA, which holds the lion’s share in the airline market in Zimbabwe, according to the Civil Aviation Authority of Zimbabwe.

In 2010, SAA "accounted for the lion’s share of the airline market with 29,3%, relegating Air Zimbabwe to second position at 22,1%. British Airways-Comair came close on third position with 18,4%, while South African Airlink holds fourth position at 10,1%," reads a civil aviation authority report.

The United Arab Emirates-owned Emirates Airlines will start flights to Harare from February 1, in what is expected to start a return of international airlines to Zimbabwe after a 10-year hiatus.

More than 15 international airlines have pulled out of Zimbabwe, among them Lufthansa, Qantas, Austrian Airlines, Swissair, Air India, Air France and TAP Air Portugal.

Mango Airline at the forefront of low-cost flying in South Africa

SAA’s low-cost division, Mango, is five years old this week. And, in spite of the predictions when it was started – that the South African market was too small to support three low-cost and two full-service airlines – now has average passenger loads of more than 80 percent and has carried more than 7 million people.

With a fleet of only five aircraft it has a smaller route network than rivals kulula.com and 1Time, but chief executive Nico Bezuidenhout says it has a 30 percent market share of the routes that it does fly. These, at present, are limited to the Golden Triangle between Cape Town, Johannesburg and Durban, with the addition of flights between Cape Town and Bloemfontein and Cape Town and Lanseria.

But Bezuidenhout says he is planning to extend the network when the airline has more aircraft and to expand beyond South Africa’s borders.

From the beginning Mango set out to attract people who had never flown before, and it succeeded. But since the economic downturn caused many companies to cut their travel budgets, Mango, like kulula and 1Time, has attracted an increasing number of business travellers. However, not all business travellers are willing to fly with a low-cost airline, even for a comparatively short distance.

So when SAA withdrew its coastal service between Cape Town and Durban, leaving it to Mango, Comair stepped in to fill the gap and reports that it, too, is doing well on the route.

Part of Mango’s success is due to innovative thinking. It encouraged first-time flyers by enabling them to book at the Money Market counters in Shoprite and Checkers while doing their shopping and later in Edcon stores, where they can pay the fares with their monthly store charge cards.

More recently, they have been able to book and pay by cellphone through FNB’s Cell Pay Point secure payment facility and Nedbank’s NPay remote payment facility. Its next innovation, according to Bezuidenhout, is to have wi-fi on board next year.

Pointing out that aviation serves as an economic multiplier, he says this has been shown by Mango’s Cape Town to Bloemfontein route in particular, which has led to increased demand for car rentals, employment of more airport staff and even increased retail spending.

He believes that there is scope for further growth in South Africa’s airline market – provided that air travel continues to be affordable. But, he warns, with a slow economic recovery on the cards, increases in airport taxes are hitting sector growth.

“In the current economy even a R50 increase could have a depressive effect on the market.”

SAA withdrew

In last week’s column I pointed out that German airline Lufthansa – which has returned for the summer after withdrawing its service between Cape Town and Frankfurt in winter – started this seasonal pattern of withdrawal at a time when SAA still flew from here to Frankfurt in winter and Qatar Airways had introduced more competition by offering indirect flights to Frankfurt by way of its home airport in Doha. Qatar, of course, is still here and so are Emirates and Etihad.

But SAA no longer flies to Germany from here and there are many local people who would like to have the option of direct, nonstop flights all year round.

This point was made this week by think tank Accelerate Cape Town in a meeting with the president’s review commission for state-owned enterprises. Guy Lundy, the chief executive of Accelerate Cape Town, told the commission that SAA withdrawing its direct flights from Cape Town to Frankfurt and other foreign destinations was “highly detrimental to our ability to do international business from here”.

SAA may not have a large enough fleet to serve Frankfurt and other important destinations from Cape Town and also follow the national policy of building Joburg up as the main hub for airlines flying into sub-Saharan Africa. But since it is no longer flying to Germany from Cape Town and there is certainly a demand for non-stop flights to Frankfurt, one can hope that Lufthansa may be persuaded to remain for the winter months.

Virgin Atlantic, which also withdraws from Cape Town in winter but has codeshare arrangements for SAA to carry its passengers to London then, is launching a new service between London/ Heathrow and Vancouver in May. Bookings will start on December 1. - Weekend Argus

South African Airways capitalises on AirZim’s woes

South African Airways has increased its seating capacity on the Johannesburg-Harare route through the introduction of the Airbus 330-200. SAA, which recently reduced its airfares for eight destinations, including the Harare Johannesburg route as a way of consolidating its market share in Zimbabwe, is one of the biggest beneficiaries of the operational problems at Air Zimbabwe.

At the launch of the A330-200 at Harare International Airport yesterday, SAA country manager for Zimbabwe Winnie Mudariki said there had been great demand on the Harare-Johannesburg route and the new aircraft will provide efficiencies to support the airline’s profitability and growth strategies.

She said the new airbus has a seating capacity of 253 passengers compared to 157 on the A 319. The new plane seats 36 passengers in business class and 186 in economy.

SAA flights have now increased to 21 a week from 14, while flights on the Victoria Falls route were 7 weekly.
Director of transport in the Ministry of Transport and Communications, Allowance Sango, concurred with Mudariki that there had been a gradual increase in demand on the route.

He noted that last year, SAA seats had started off at 3 920 per week, risen to 4 390 and ended the year in December at 5 264. This year, seats had increased to 5 394.  Demand on the Vic Falls route had also increased to 1 680 seats from December’s 1 162.  

The move to introduce the larger airbus comes after a number of airlines have expressed interest to service the Zimbabwe route.  Emirates airline, which will ply the Zimbabwe-Zambia-Dubai route next year, will also operate an A330-200 aircraft.

South Africa’s ambassador to Zimbabwe Vusi Mavimbela acknowledged the competitiveness of the environment but said that the launch indicates that SAA is riding the storm of the economic crisis when other airlines are cutting back. 

He said that Zimbabwe will play a crucial role in the development of the region in future, and as such, its transport infrastructure needed to improve.

Comair deals with baggage pilfering as problem gets ‘out of control’

Comair, which manages British Airways and Kulula.com in South Africa, says it is tackling the scourge of baggage theft head-on. This comes after SAA said baggage theft at OR Tambo International Airport was out of control, with more than a dozen bags being stolen every day.

Gidon Novick, the joint chief executive of Comair, said efforts to deal with baggage pilfering was yielding results. “Less than one per 5 000 bags carried on Comair flights is being pilfered,” Novick told IOL. This works out to .2 per 1 000 bags, which is less than the international average of .3 bags per 1 000.

Last month South African Airways (SAA) CEO Siza Mzimela said that “baggage theft remains very high and OR Tambo International is out of control”. She added that pilfering at South Africa’s other airports was also “very high”. SAA’s acting head of group corporate affairs, Dileseng Koetle, said that pilfering at OR Tambo was .6 bags per 1 000.

"How can we promote SA as a tourist destination if their first experience of the country is the loss of their luggage?" asked Greg Krumbock of the Democratic Alliance.

According to a report released by SITA several years ago, 98% of the 2.25 billion items of luggage checked in at the world’s airports arrive at the right time at the right place. But the remaining percentile still amounts to 42 million bags, passenger frustration and US$3.8 billion in fines.

The Airports Company of South Africa (ACSA) said it had been working hard to solve the problem, which has been on the decline over the past few years. ACSA head of communications Solomon Makgale, said there had been “a consistent improvement” in the situation for the past five years and the average number of bags pilfered at OR Tambo had dropped from 36 a day to 14 a day. Since January last year, 18 people at OR Tambo have had their access cards blacklisted after being caught pilfering luggage.

Makgale said that baggage theft happens in three main areas – within the baggage sorting system, on the way to the aircraft, and in the hold of the aircraft. Consequently, “ACSA has installed CCTV cameras which enable us to catch the criminals in the act,” in the sorting area. He recommended that airlines install CCTV cameras in the holds of their aircraft.

Novick said Comair had improved the baggage pilfering situation by physically monitoring baggage whilst it was at the airport and getting baggage handlers to wear thick gloves so they cannot feel the contents of the luggage. “If an irregularity is found, baggage handlers’…restroom and lockers are searched both at the departure and arrival airports,” Novick said. “Staff face disciplinary action and polygraph testing if warranted.”

“We will continue to take this zero tolerance approach with all loopholes tightly closed until pilfering is eradicated,” Novick told IOL.

Other airlines are also taking steps to mitigate the problem. British Airways said its team at OR Tambo has seen a decline in baggage damage and pilfering and that security guards were present when bags were being loaded and unloaded.

Mango spokesperson Hein Kaiser told IOL that “presently pilferage averages between 0.2% and 0.6% dependent on the time of year,” adding that “Mango continues to work with all role players including ACSA, the SA Police Service, our shareholder SAA, and other airlines among others toward a remedy.”

In-flight Internet still coming to South Africa

In-flight Internet will be available to SA air passengers as soon as the South African Civil Aviation Authority (SACAA) gives it the green light.

An application for in-flight Internet will be submitted to the South African Civil Aviation Authority this month, said Wireless G CEO Carel van der Merwe. Wireless G has the sole rights to provide the service in Africa starting from May 1.

According to Internet service provider Wireless G, the satellite-based technology, which delivers high-speed Internet at high altitude, will be rolled out locally in partnership with one airline, which it could not reveal at this time.

Wireless G earlier said in-flight Internet would be available as soon as April. Earlier this year, Mango Airlines announced it was going to offer Internet connectivity onboard for its Johannesburg and Cape Town routes from 1 May. However, this project did not take off as planned.

Although Mango was to be the first airline to offer the service, Wireless G is in discussions with other airlines.

However, the SACAA said there has been no formal application nor approval granted by the authority for in-flight usage of Internet services. Wireless G said it will submit an application to the SACAA this month.

van der Merwe said in-flight Internet will be a major breakthrough in terms of convenience, productivity, entertainment and advantages of having communication in general. He said this will benefit more than 19 million local airline passengers.

“SA is a country with a device penetration rate of more than 100% and broadband take-up grows more than 30% per annum. In-flight WiFi is the missing link in telecommunications,” he said.

Two factors that determine the solution viability in Africa are the bandwidth capacity to meet user expectations and the route coverage over remote areas, Van der Merwe pointed out. “There is only one solution at this point in time that caters for this, which is WiFi connected to satellite backhaul, he said.

Using Fli G-Connect will be the same as picking up a Wi-Fi signal from anywhere else, with speeds consistent with the normal Wireless G Wi-Fi hotspot experience. Either a voucher is purchased or a customer puts in existing G-Connect account details. The service will be cheaper for G-Connect customers, who would also be able to take unused bandwidth with them.

Wireless G said that on-board connectivity is a common request from airline passengers, and that 95% of frequent fliers in the United States agree with the statement that in-flight Wi-Fi is "the best thing airlines have done" in the last three years. 50% of business travellers take Wi-Fi enabled flights to be "reachable" during business hours, WirelessG said.

According to Wakefield Research and the Wi-Fi Alliance, Wi-Fi has clearly become a major decision-factor in frequent fliers' choosing of airlines. 76% of frequent fliers would change their airline to have in-flight Wi-Fi. 55% of them would change their flight by a full day to have it. And another 71% of frequent fliers would prefer Wi-Fi access rather than meal service.

On Virgin America flights 10-15% of passengers pay for in-flight Internet and on transcontinental flights up to a quarter of passengers make use of the service, Wireless G said. Due to shorter flights within South Africa, early models show a 15% take-up rate will be critical.

The technology uses a low-profile antenna, four compact line replaceable units, a server management unit, a high power amplifier, an antenna control unit and a modem data unit on each equipped aircraft.

To deliver a WiFi signal, one or more wireless access units will also need to be placed in the aircraft.

Van der Merwe said WirelessG is ready in terms of getting the first aircraft connected. “Further announcements related to progress and readiness will be made together with our first airline and backhaul provider partners.”

SACAA spokesman, Kabelo Ledwaba, said just like fitting any additional equipment on aircraft; this equipment will have to first be approved by the SACAA. In this case, the applicant will have to apply for and be issued with a Supplemental Type Certificate (STC) Safety certification.

Moreover, provided that an STC is issued for a particular type of aircraft, an airline or operator may apply for the piece of equipment to be installed for each individual aircraft and that will be recorded in the aircraft file.

Regardless, Ledwaba said that to enable in-flight Internet usage, an aircraft would have to be modified with equipment such as antennae, wiring, and the like, in order to enable in-flight WiFi transmission.

The STC has already been approved by the US Federal Aviation Authority (FAA) and will be submitted to the CAA this month, Van der Merwe said.

Last week the SACAA announced that it would now allow the use of cellphones onboard. This means while a passenger's phone is on in-flight mode, they will be able to connect to the in-flight WiFi, WirelessG said.

“It would, therefore, come as no surprise when we receive an application by an operator who may want to provide passengers with an additional benefit, thus gaining competitive edge over other airlines,” the SACAA said.

The safety of in-flight wireless Internet has already been approved by the FAA and the technology has been installed on some 800 planes in America already. Extensive testing was done in the United States to ensure the equipment does not interfere with aircraft avionics.

Only South African Airways allows cellphones on flights

South African Airways (SAA) is currently the only airline that can test the feasibility of using cellphones on its flights, the SA Civil Aviation Authority (Sacaa) said on Friday.

"The Sacaa wishes to clarify that despite reports from some media outlets, SAA to date is the only operator/airline that officially applied and received the requisite exemption to test this possibility," spokesperson Kabelo Ledwaba said.

He said SAA was granted a six-month exemption in January and that the testing phase started on April 15.

One of the conditions of the exemption was that the airline submit a detailed proposal on how it would monitor the use of cellphones during flights.

The Sacaa would in addition conduct its own monitoring, Ledwaba said.

"The initial testing phase is for six months and, depending on the results of these tests, the Sacaa may conclude the testing phase or may request further tests."

The testing would take place on certain domestic routes, for each aircraft type in the SAA fleet and at certain specified times of the day.

There would also be onboard announcements advising passengers that testing would be conducted and guidelines on what the tests would entail.

He said the civil aviation regulator and the aeronautical information circular still prohibited the use of certain electronic devices, including cellphones on flights.

However, it acknowledged that technology advanced rapidly and the fact that airlines showed interest in testing the feasibility of using cellphones of flights came as no surprise.