A couple of things struck me as I pounded the floors of Durban’s International Convention Centre during South Africa’s annual Tourism Indaba. Firstly, the South African travel industry is very small, and secondly, because of the first point, it’s amazing what little titbits of information you can pick up if you keep your ears open.
The first bit of interesting news to reach me was the rumour that one of South Africa’s big hotel groups was about to be purchased, and that it would be a big surprise to the country’s travel trade industry when it was revealed just which of the groups it was. This was all I had by the time we went to press, so it may well prove old news by the time you pick up this issue of the magazine. Either way, it was a tasty little titbit.
The second piece of information was more a consensus or general feeling from interested parties, when I quizzed them on the two proposed new entrants into the South African budget airline space – fastjet and Skywise. Fastjet already has a foothold, having entered the market on Federal Air’s licence, and it’s going to be interesting to see what headway it makes, applying the principles that have made easyjet such a big player in the European market. But, it’s not going to be easy. In fact, those ‘experts’ I chatted to at Indaba believe it’s just not going to be sustainable, having two more budget operators entering the market, particularly as the two parties concerned appear to be hanging their hats on the Johannesburg-Cape Town route – a route that already resembles a German autobahn, in terms of the number of players and operators already flying the route.
Yes, they are expected to compete on price and undercut the industry, so the consumer may win in the short-term. But, will this be sustainable? As always, time will tell.
Skywise, though, face another challenge. It’s no secret that the people behind it are the founders of 1time, which went down the tubes last year. But, this group of businessmen exited 1time well before things really went south, and the industry doesn’t appear to have forgotten this. Most of the travel trade executives I chatted to in Durban made it clear that they wouldn’t support Skywise, purely on the basis of what went on at 1time and how the founders of the airline handled matters, skipping off before the real trouble started and going on to start a new budget airline. All the while, people were losing jobs and consumers, card companies, banks and travel management companies were forced to pick up the pieces and deal with the financial repercussions.
Again, time will tell, and if Skywise do indeed launch at the end of 2013, it’s going to be interesting sitting on the sidelines and observing whether or not it gets the support it is looking for, as it enters an incredibly competitive market, and one that has a pretty short memory.
Dylan Rogers