Flight prices decline as local airlines competition takes off

Image: www.travelstart.co.za

The online booking company compared January and February 2015 flight prices against the same period last year and found that 14 local routes to be cheaper than what they were in 2014. Of the 18 routes analysed, only 4 are more expensive than what they were at the same time last year.

Routes which are cheaper now than what they were last year

Travelstart attributes the decrease in domestic fares to the entry of FlySafair who commenced operations in October 2014.

"We've noticed a trend where airfares on previously monopolized routes have come down significantly since last year", said Russell Jarvis from Travelstart. "It's interesting to note that most of the routes where there was a marked decrease in prices are all routes where FlySafair now have a presence".

Of the 18 routes analysed, the top 10 which have significantly reduced in price since 2014 are routes operated by newcomer, FlySafair.

The information shows consumers paid 39% less for a flight from Cape Town to George in January/February 2015, while the popular commuter route from Johannesburg to Cape Town was on average 16% less than what it was at the same time last year.

FlySafair, the carrier touted as South Africa's "true low-cost airline", initially struggled getting off the ground being met with restraint from competitors such as Comair (BA/Kulula). The High Court in Pretoria ruled in favour of the rival airlines, granting an interim interdict against FlySafair which delayed the airlines' entry into the market by a year.

While the marked decrease in flight prices is welcomed, Travelstart says consumers should be wary of hastily accepting current prices as a sign of things to come. "FlySafair's low prices are typical of a launch strategy whereby an airline decreases prices on the routes they operate in order to gain some market share from competitors".

Routes which are more expensive now than what they were last year

While the competition FlySafair has created in a market which was up until recently dominated by only two major players and their subsidiaries is welcomed, consumers should consider FlySafair's extra baggage fees which did not form part of the information released by Travelstart.

While charging an additional amount for luggage is consistent with the true low-cost carrier business model, these extra charges were not factored into the flight prices displayed above.

Independently owned low-cost carrier Skywise, which finally took to South African skies on 5 March after suffering numerous licensing issues, joins the now healthily competed and high traffic route between Johannesburg and Cape Town with their twice daily flights.

"We eagerly anticipate the impact of Skywise's entry into the market, and hope to see prices move even further in the favour of consumers as the six major domestic airlines in South Africa try to remain competitive", said Jarvis.

More people flying

Travelstart's information indicates demand for domestic air travel has increased since last year with bookings on the popular commuter route between Johannesburg and Cape Town increasing by 38%.

13 of the cross-section of domestic flight routes analysed have increased in demand indicated by bookings made on the Travelstart website.

"The demand on popular routes such as Johannesburg - Cape Town again indicates consumers shouldn't hastily accept the current lower prices we are enjoying as being set in stone".

Demand for the route between George and Cape Town, one which FlySafair operates, has increased by 120% since 2014.