Cape Town - The saturated low-budget airline offering in South African skies might be beneficial to consumers at the moment, but will cause market volatility in the future, Mango CEO Nico Bezuidenhout warns.
Bezuidenhout highlighted his concern over the highly competitive low-budget airline market in South Africa following the recent World Routes Summit, held for the first time on African soil in Durban from 19 - 22 September.
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There are currently four budget airlines, namely Skywise, FlySafair, Mango and kulula.com serving South African skies and Bezuidenhout says "Something’s got to give".
His concern is reflected in the domestic aviation market growth. Mango said in a statement that year on year, the domestic aviation market has grown by 2%, while available capacity grew by 7%, thus creating a 5% oversupply.
To keep passengers on board flights, airlines resort to cutting costs despite the long-term harm which can be done to their businesses.
In August, Traveller24 reported that booking site TravelStart also warned passengers that airlines such as mango, kulula and FlySafair attempt to out-seat-sale each other in a bid to win consumers over, despite the overall health of the industry.
READ: Passengers warned air ticket price drop won't last much longer
Travelstart's Russel Jarvis warned travellers not to expect the overall air ticket price drop to continue for much longer as the decrease in fare prices on several local routes could be detrimental to the growth of the commercial aviation industry.
In August this year, FlySafair ran a 'R1' promotion to celebrate their one year anniversary in South African skies.
When asked if FlySafair was running the sale inventory at a loss, Kirby Gordon, VP of Sales and Distribution for FlySafair confirmed the airline was “absorbing the taxes” but chose to do so "as a marketing objective to get its name out there" as they were still considered the "new kid on the block".
READ: FlySafair: R1 sale set 'new domestic aviation record'
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