It’s no secret that South African Airways (SAA) is struggling. This was the case long before the aviation industry was struck by the current health crisis. Now, whatever passenger traffic the struggling airline served has further evaporated as travelers are urged to stay home. So if South Africa’s flag carrier collapses, could we see the country open up its domestic routes to foreign flag carriers?
If SAA collapses, then we would see a significant void with regards to service on South Africa’s domestic routes. While South Africa isn’t as big as Canada or Russia, air travel is still necessary to connect faraway cities. A 14-hour journey by car or 26 hours by train would be the only alternatives to connect Johannesburg and Cape Town.
Therefore, there should be no doubt that there will be demand, even if SAA isn’t able to fill it. So the question remains, who would take over SAA’s market share
SAA isn’t the only airline in South Africa, but the domestic situation is somewhat messy. Here are the options for air travel within South Africa:
- Kulula: A low-cost airline operating out of O.R. Tambo International Airport and Lanseria International Airport.
- FlySafair: Another low-cost airline based out of O.R. Tambo.
- Mango: The low-cost subsidiary of South African Airways. We would likely see this subsidiary brand fall if SAA folds.
- SA Express: A state-owned airline that operates independently of SAA but still has a strategic alliance with the carrier.
- SA Airlink: A privately-owned airline that has agreements with SAA and SA Express.
- British Airways (Comair): While this airline has British Airways branding and coordiantes its schedules with BA long-haul flights coming from London, the airline is actually registered as Comair. Comair is the parent company to Kulula.
As you can see from the above list, things are a little complicated. You have a mix of privately-owned airlines and their subsidiaries partnering with one another. If we group things together, we can see the industry isn’t as diverse as it appears. However, some of these airlines could be capable of filling in SAA’s potential void.
Could foreign airlines jump in?
The one example we are mainly looking at is Singapore Airlines. Under normal circumstances, the airline would run a daily service going from Singapore to Johannesburg to Cape Town. The return service mirrors the outbound, going from Cape Town to Johannesburg and on to Singapore
As it stands, the airline doesn’t have the right to run a domestic service and pick up passengers in Johannesburg for drop-off in Cape Town. Nor can it take passengers from Cape Town to deplane in Johannesburg.
However, if SAA collapses, then this, in theory, would be an easy way to have at least one additional daily service on this very busy route. So what might stand in the way of something like this?
Why this wouldn’t work
There are two main reasons why we don’t see this working
Firstly, it would be a bit of a mess in terms of customs and immigration. Either domestic travelers would have to “stamp out” and “stamp in” with their passports, or all international travelers would be required to de-plane to clear customs in Johannesburg. The only way this could work (without doing the above) is if the foreign airline ran an extra domestic-only round trip from Cape Town to Johannesburg while it was on that side of the world. Either way, this seems operationally complicated and probably not worth the hassle.
Secondly, as you can see above, South Africa has a small list of other operators that could fill the void. This might not be enough to fully meet the demand, but it would be a safer move politically.
The only “safe” way for foreign airlines to get a piece of the domestic market would be to buy in and invest in a South African carrier. Ethiopian Airlines has done this with airlines like Malawian Airlines, ASKY, Ethiopian Mozambique Airlines, and more.
It will be very interesting to see what happens to South African Airways over the next few months and whether it can survive this crisis and recover in any meaningful way. If it does collapse, it will also be interesting to see how other airlines in the country shift to fill the void.
Culled from simleflying.com