CemAir goes mainstream, grows operations by 50%
While airlines worldwide fight for their survival in the wake of Covid-19, regional airline CemAir is increasing operations by 50%.
It was the first local airline to take to the skies after the hard lockdown ended, entering the mainstream domestic market with almost daily flights between Johannesburg, Cape Town and Durban.
CemAir is also buying three Airbus A319 aircraft and has applied for approvals for flights to six more destinations in Africa.
Before Covid-19 CemAir provided charter flights and leases to other airlines as well as scheduled flights to smaller, municipal airports in South Africa and destinations in southern Africa.
Good time to buy aircraft
The airline, owned by pilot Miles van der Molen, owns a fleet of 34 aircraft, but it is “now or never” in terms of growth, says marketing manager Shaniel Singh.
With the industry in crisis, there is an oversupply of aircraft and as result prices have dropped significantly.
Singh says CemAir became “the king of repatriation flights” during the hard lockdown.
“We brought 8 000 South Africans home from 23 countries,” he says.
This was no simple task. The operator could only apply for the required permits once there were enough passengers, but the passengers wanted to know when the flight would depart before making their booking.
Singh says the domestic air travel market has changed dramatically due to the impact of Covid-19.
Airlink and FlySafair started flying shortly after CemAir, while SAA and Comair’s two brands – British Airways and kulula.com – have not yet returned to the sky. Comair has reopened bookings and hopes to resume flights on December 1, but a court battle with labour might put a spanner in the works.
Airlink, a regional airline like CemAir, is now also flying the main routes. It has changed its colours and announced new routes to Dar es Salaam in Tanzania and Lubumbashi in the Democratic Republic of Congo.
Singh says the domestic market is recovering, although many corporates are still to change policy to allow the resumption of business travel.
FlySafair, according to its marketing manager Kirby Gordon, expects passenger numbers in December to be at only 57% of the previous December. FlySafair is, however, operating at the same level as in November 2019 and even expects a bit of growth in December.
By January there will be seven operators in the domestic market, namely CemAir, Airlink, FlySafair, Mango, British Airways Comair and kulula.com, as well as newcomer Lift.
Of these only CemAir and Airlink offer full service.
Flight Centre MD Andrew Stark says the increase in airlines will stimulate demand and drive ticket prices down.
Transport economist Joachim Vermooten says it is critical for airlines to use the right aircraft for each route. The bigger the aircraft, the bigger the risk, he says. “When you fail to fill up a large aircraft, you lose money very fast,” he says.
Airlink’s E190 Embraer aircraft with two seats on each side of the aisle works better for social distancing than aircraft with three seats on each side, he says.
Vermooten says domestic load factors are currently at only 26% compared to a year ago. He expects this to increase to 30% next year and 45% in 2022.
He says managing supply and demand is very challenging in the current market and most airlines won’t be able to utilise their full fleet as they did before the pandemic hit.
He cautions that the market might be fully served when SAA eventually resumes flying. That might necessitate further subsidies for the national carrier, to the detriment of its competitors.
Culled from Moneyweb
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