A new direct seasonal service by Virgin Atlantic Airways (VS) between Cape Town and London has the potential to add R73 million per month to the Western Cape economy in terms of direct tourism spending.
This is according to Wesgro (the official tourism, trade and investment promotion agency for Cape Town and the Western Cape).
Wesgro announced on Wednesday that there will be a daily direct seasonal service between London Heathrow and Cape Town with VS, starting from October 2020 onwards.
A report by Airports Company SA (ACSA) states that each regularly scheduled long-haul service could support up to 3 000 jobs and every 10% increase in passenger volumes results in 2% regional job growth.
This is not the first time VS has operated direct seasonal flights between London and Cape Town. Until April 2015, it operated a daily direct Cape Town to London Heathrow service during the South African summer season.
However, it stopped this seasonal service due to what it explained at the time as strong competition especially from Gulf carriers as well as the high cost of operating an Airbus A340-600. It, therefore, decided rather to focus on expanding its North American network and other long-haul routes at that time.
British Airways announced a second increase to its South African services, adding three more flights between Heathrow and Cape Town this summer. The three new services will start on March 20 until April 19 2020.
The news comes a week after the airline announced it would be increasing its services from Gatwick to Cape Town from three to five a week from January 2021. British Airways is the only airline to offer year-round direct services between Cape Town and London.
According to Wesgro, the cancellation of the VS seasonal service, together with the withdrawal of South African Airways (SAA) as an international carrier from Cape Town in 2012, prompted the start of the Cape Town Air Access (CTAA) initiative. The CTAA is a project housed within Wesgro. It is a partnership between Wesgro, the City of Cape Town, the Western Cape Government, ACSA, Cape Town Tourism and SA Tourism.
CTAA believes the VS seasonal route should be successful because of the advancement in aircraft technology, allowing for greater efficiency. Furthermore, the UK is the largest origin-destination market for Cape Town for both inbound and outbound traffic.
"There is a gap from the recent cancellation of the Thomas Cook service, which operated three seasonal flights per week between Cape Town and London Gatwick," Paul van den Brink, project manager of CTAA, tells Fin24.
Furthermore, CTAA sees growth potential for air cargo between the UK and Cape Town and the local Cape Town business community indicated that they would support a VS flight.
According to Liezl Gericke, head of Africa, the Middle East and India at Virgin Atlantic, the reinstated service will make it even easier for its customers to travel for business and leisure between South Africa and the United Kingdom, while at the same time creating additional cargo capacity for the route.
Deon Cloete, general manager of Cape Town International Airport, says the Cape Town-London route is a prime one and will no doubt be very popular, especially given the frequency of the connection.
He foresees that it will help to create a more competitive environment which will improve the value proposition for passengers from a pricing and product perspective.
Since its inception in June 2015, the CTAA team has negotiated and assisted with establishing 17 new direct flights – including the re-introduction of the upcoming VS service - and 22 route expansions into Cape Town International Airport (CPT).
"One of the previously elusive goals for the team was pursuing the entry of a second major carrier on the London to Cape Town route. This became more pressing since the closure of Thomas Cook Airlines in September 2019, making British Airways (BA) the only direct carrier serving the biggest air passenger market for Cape Town," says Van den Brink.
In December 2019 the US carrier United Airlines started with its first ever South African service - a seasonal service between Cape Town and New York/Newark. The new route was also secured by CTAA.
CTAA data shows that the UK passenger market represents 12% of the total international passenger market for Cape Town and the Western Cape. It brought just over 380 000 passengers in 2018 of which BA has more than 40% of the market.
"The CTAA team has had numerous engagements with VS over the past few years and the airline has always indicated that Cape Town is high on the list of possible new destinations, but it has never materialised until now," says Van den Brink.
CTAA analysis of the average fare charged by airlines for Cape Town since inception of the CTAA project in 2015 shows a reduction of 16% in the total fare and 12% in the average discount-economy fare over the last five years.
In the CTAA's view, the drop in fare prices can be attributed to the growth in capacity and passenger numbers due to the increase in direct air services into Cape Town International Airport.