Gordhan grounds high hopes for SAA niche routes

Minister of Public Enterprises Pravin Gordhan told Members of Parliament in a written reply that South African Airways (SAA) was not in a position to take advantage of niche routes with growing traffic, such as flights between Cape Town and Durban, and between Durban and Bangalore.

These remarks come at a time when SAA is recovering from hard financial times in recent years. The airline is looking at the possibility of disposing of assets and has even spoken of dumping loss making routes on its path to stability and, later on, profitability.

Gordhan explained to Parliament that the national carrier was leveraging its partnerships with other airlines to use routes that it could not focus on directly.

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Member of Parliament for the Inkatha Freedom Party Narend Singh asked Gordhan whether SAA has considered reintroducing its route between Cape Town and Durban, “given the high volume of air traffic between the two specified cities”.

He also asked whether SAA would consider opening a route to Bangalore, “given the high volume of air traffic between Durban and India”.

Gordhan said SAA already had a presence on the Cape Town-to-Durban route through its low cost subsidiary airline, Mango Airlines, which operates up to six return flights per day between Cape Town and Durban.

“Due to current market conditions and the market dynamics, SAA’s operation between Cape Town and Durban would not be profitable at this stage,” said Gordhan.

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Gordhan added that the market had a high number of price-sensitive leisure passengers, which does not make for an ideal market for SAA as a full service carrier.

“Due to current market conditions and demand projections including yields on the market, SAA would not be in a position to operate direct flights between Durban and Bangalore,” said Gordhan.

Gordhan said the Durban-to-Bangalore route was currently serviced through a partnership with Emirates, who already operate into Durban.

“SAA continuously monitors market trends and changes with the aim of evaluating the economics of a route and ultimately its profitability,” Gordhan said.

The minister concluded that once SAA had addressed its cost structure and profitability, its stance on the viability of such routes would likely be reviewed.