IATA: Budget airlines struggle continues

2013-05-31 08:23
Cape Town - Some low cost airlines will continue to close down as a result of escalating fuel prices, dwindling passenger numbers as well as razor thin profit margins, says International Air Transport Association (IATA) Director of Operations in Africa, Mike Higgin.

SABC reports Higgins said certain routes in South Africa are not sustainable for low cost airlines.

“I've been in South Africa for a long time we've seen a lot of LCC collapse and the yields just do not support the operations and operations cannot expand exponentially. So it's a matter of those two things and I won't go into things like how the companies are run, I'm not that sort of knowledgeable but the cost increases, the yields are going down and the passenger numbers.”

This statement was released as Comair awaits it High Court date to challenge the R5-billion government guarantee to South African Airways in February 2013.

"Comair's sole objective with this legal action is to attain a level playing field in the domestic aviation market to ensure that all airlines face the same risks and the same requirements to operate on sound commercial principles. By receiving government bailouts SAA avoids this commercial reality and this negatively impacts on all current and potential airline operators," said Comair CEO, Erik Venter.

A previous report incorrectly include attribution to former a IATA Chief Executive - News24 Travel apologies for the error, which has been amended.
Read more on:    cape town  |  travel international  |  flights
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