Airlink + FlySafair: Here's what you need to know about the planned merger

2017-11-29 07:28 - Selene Brophy
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Cape Town - With Airlink and FlySafair announcing plans to apply to the Competition Commission for approval to unite under the Airlink group of companies - connectivity and choice for local travellers can only get better, if it is approved.

The proposed merger is said to be similar to the British Airways, Comair and kulula business model. Comair has demonstrated its adaptability in a volatile and relatively throttled domestic and regional market to be one of the world’s most efficiently run aviation operations – with product diversification and profitability part of its core DNA.

SEE: FlySafair ups frequencies on popular SA summer routes

While Airlink recently had an issue with one of its planes needing to make an emergency landing, the economy of scale with the merger, added to the benefit of combined operational costs would give these airlines the ability to future-proof their businesses more efficiently.

FlySafair has been robust in its route and fleet growth. The airline added two new Boeing 737-400s to its fleet, which is helping to fulfil its additional capacity requirements with the recent launch of flights between Durban and Port Elizabeth, and Durban and East London. 

With an application for approval of the business deal submitted to the South Africa’s Competition Commission on Monday, 27 November - the final decision is only expected in the first quarter of 2018.

Here are the key questions around the merger answered for travellers:

  • Who are the role players?

Airlink was established in 1992 and is the leading regional airline in Southern Africa.  It has a route network of 37 destinations in nine countries and St Helena island.

Safair Operations was established in 1965 and has been a leader in the provision of specialised aviation services for the past 52 years. In 2014 the company launched FlySafair, a low-cost carrier competing in South Africa’s domestic market.

  • Why have they decided to do this?

According to Airlink CEO and Managing Director, Rodger Foster it presents opportunities for growth. The merger will “reduce combined costs, increase connectivity and choice, while making air travel accessible and affordable”.

  • How does this affect any existing travel arrangements going forward?

It does not. The airlines would continue to operate separately, with no impact or changes to existing or future travel arrangements.  The airlines will retain their respective products, aircraft fleets, management and leadership teams.  In a joint statement the airlines confirmed “employees will be secure with no job losses because of the consolidation.”

  • Will it make travel cheaper in South Africa?

Coming under a single umbrella will create economies of scale that will enable both airlines to optimise assets and remove systems duplications, according to Elmar Conradie, who will remain as Safair CEO.  While the airlines are unable to comment on this directly as the matter heads to the Competition Commission, Flight Centre – one of SA’s largest travel operators has given the merger the thumbs up.

Sue Garrett, Flight Centre Travel Group General Manager Product and Marketing says, “It would be a positive move. The business models of each airline are completely different, as are the routes they service, so through this merger both carriers could look at opportunities to reduce costs in areas that would make commercial sense to share.

Garrett points to an “interesting” model achieved by the airline merger, one that is not dissimilar to that currently enjoyed by BA Comair and kulula.com.

  • What other benefits would it have for Travellers going forward?

The combined FlySafair networks connect 37 destinations in nine Southern African & Indian Ocean countries and St. Helena.  The airlines state it will "stimulate and enable trade, tourism, economic growth and social development in those markets".  

  • How does it affect Airlink’s franchise with SAA?

It doesn’t. According to the airlines, the “Safair purchase will not affect Airlink’s existing SAA franchise partnership, which continues to deliver traffic and business to SAA and Airlink while their customers benefit from the value, convenience and connectivity the arrangement provides”.

“As part of its continued commitment to the aviation industry within South Africa, Safair shareholder ASL Aviation Holdings will become a minority shareholder of the Airlink Group of companies.  ASL Aviation Holdings is a global aviation group with 6 European and 2 Asian airlines in addition to its South African interests.”

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