Plugging the gaps

1110

Privately-owned South African airline CemAir has decided to take on established operator SA Express on the Johannesburg-Bloemfontein route. Editor Dylan Rogers took the inaugural flight and later caught up with CEO Miles van der Molen to get more on CemAir’s background and their approach to commercial flight.

Let’s clear up a couple of things, CemAir is no low-cost airline and no rookie operation.

One of South Africa’s newest players in the scheduled services space has actually been around for 10 years, but until a couple of years ago focused on building a financial foundation based on over-border contract work.

In fact, CemAir has operating and leasing experience throughout Africa and the Middle East, including in Afghanistan, Tunisia, Sudan, Democratic Republic of Congo, Kenya, Mali, Gabon, Ghana, Namibia, Botswana, Mozambique, and South Africa.

2013 saw CemAir launch its first South African domestic route, in the form of Kwazulu-Natal coastal town Margate, which was followed in 2014 by Plettenberg Bay on the Garden Route and Kathu – home to the Sishen industrial area – in the Northern Cape.

Margate and Plettenberg Bay may have reputations as South African leisure destinations, but Van der Molen believes there’s another side to them.

“A lot of people have moved to smaller towns, and they need to commute to major centres for work reasons,” he says. “One of the most popular flights out of both Plett and Margate leaves at 06h30 on a Monday morning to get you to Jo’burg at the beginning of the work day. It’s not that we focus on the business market, but we do need to focus on the more active market where people want convenience.”

Now Bloemfontein is on CemAir’s radar.

“We believe the current service provider, who has a monopoly there, can be challenged quite easily,” says Van der Molen. “There’s a large travelling population on the route, with around 400 seats flown each way each day. So, there’s already a large market, and getting a portion of that market looks achievable.”

But this is no low-cost offering, with CemAir going in with a CRJ jet and a full service, which includes a complimentary meal, proper coffee mugs, and decent cutlery.

“Our slogan is that we’re South Africa’s most personal airline,” says Van der Molen. “We’re trying to put a personal touch back into aviation. We’re not in the low-cost space where it does become a high volume. So, we are trying to get the smaller things right.”

That includes possibly gobbling up more routes, as CemAir looks for similar opportunities to that offered by Bloemfontein.

“We have been approached by quite a few smaller centres looking for an alternative,” says Van der Molen. “We’re in the beginning stages of arranging with Grahamstown (in the Eastern Cape). There’s seems to be an enormous need there, and a massive amount of enthusiasm. For jet operations we’re looking at Jo’burg-Kimberly, Jo’burg-Hoedspruit and a few others. Ultimately, we see opportunities out of Cape Town in the reverse direction to some of these centres, where again there is a lack of service or unhappiness with pricing or quality.”

Speaking of pricing, it’s not too bad a time to be in the airline business, due to the drop in the global oil price. Or is it?

“Where we’re working for oil companies, they’re feeling the pinch,” says Van der Molen. “In some cases they’ve imposed a price reduction on their suppliers, unilaterally. On this side it’s helped a lot, because it allows us to start a route like Bloemfontein with our biggest single cost reduced.”

But Van der Molen offers another take on the situation.

“The other major cost driver of aircrafts is the parts, and we’re buying those at very close to R12 to the dollar at the moment,” he says. “So, the reality is that just because the oil price has dropped, doesn’t mean that the cost of air travel will come down.”

With that in mind, Van der Molen says he’s confident the market he’s targeting is happy to pay for a premium service on the various routes CemAir flies.

“We’re a regional airline, not a low-cost airline, and we do explain to people why we cannot compete in the low-cost space,” he says. “And when you explain to people, they do generally understand.”