An SA Express-Airlink tie-up may make sense
Cape Town - The feeder services supplied to SAA by Airlink and SA Express were an essential part of their network, but it was not necessary to their successful commercial relationship for the national carrier to own either of them, Rodger Foster, the chief executive of privately owned Airlink, said yesterday.
Foster, one of the principal shareholders in Airlink, said that the possibility of a merger between SA Express and Airlink had been investigated in 2001 and 2002 but abandoned.
He added that "it might make sense now", but there had been no dialogue or negotiations since then.
He was responding to a suggestion by Alec Erwin, the minister of public enterprises, that SA Express, which would remain in state ownership but a separate entity from SAA, might be amalgamated with Airlink at some time in the future.
Foster dismissed a suggestion that SAA's low-cost airline, Mango, could replace the full-service airline in the domestic market if the national carrier's turnaround strategy failed.
"Low-cost carriers provide a point-to-point service, but do not act as part of a network providing a domestic, regional and international service with interline agreements to carry passengers for foreign airlines," he said.
"Mango is in a different market from SAA. It is a spin-off division designed to generate profits for the national carrier and provide cheaper services for the general public."
However, industry sources were surprised by the fact that SAA appeared to be competing with itself by offering special fares on its website that, in some cases, were lower than Mango's in order to fill vacant seats on some flights.
They called attention to the fact that both Australian airline Qantas and Thai Airways have started low-cost divisions, but their special offers never compete with their low-cost subsidiaries.
They pointed out that SAA, like some other state-owned airlines that had either been closed or restructured and privatised, had an enormous infrastructure that made it impossible to operate profitably and hence the airline needed radical restructuring.
Article from http://www.busrep.co.za
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Foster, one of the principal shareholders in Airlink, said that the possibility of a merger between SA Express and Airlink had been investigated in 2001 and 2002 but abandoned.
He added that "it might make sense now", but there had been no dialogue or negotiations since then.
He was responding to a suggestion by Alec Erwin, the minister of public enterprises, that SA Express, which would remain in state ownership but a separate entity from SAA, might be amalgamated with Airlink at some time in the future.
Foster dismissed a suggestion that SAA's low-cost airline, Mango, could replace the full-service airline in the domestic market if the national carrier's turnaround strategy failed.
"Low-cost carriers provide a point-to-point service, but do not act as part of a network providing a domestic, regional and international service with interline agreements to carry passengers for foreign airlines," he said.
"Mango is in a different market from SAA. It is a spin-off division designed to generate profits for the national carrier and provide cheaper services for the general public."
However, industry sources were surprised by the fact that SAA appeared to be competing with itself by offering special fares on its website that, in some cases, were lower than Mango's in order to fill vacant seats on some flights.
They called attention to the fact that both Australian airline Qantas and Thai Airways have started low-cost divisions, but their special offers never compete with their low-cost subsidiaries.
They pointed out that SAA, like some other state-owned airlines that had either been closed or restructured and privatised, had an enormous infrastructure that made it impossible to operate profitably and hence the airline needed radical restructuring.
Article from http://www.busrep.co.za
Fly and drive. Either way, get unlimited mileage with www.southafrica-carhire.com
Labels: South Africa - Airlines
