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Flic en Flac – South African Airways (SAA) must beware of losing market share on its regional routes in Africa, according to aviation specialist Nawal Taneja.
“The opportunities in the aviation industry in Africa lie in forming partnerships. Kenyan and Ethiopian Airlines are growing, while it is questionable whether SAA can manage the same,” he said at the 44th annual general meeting of the Airlines Association of Southern Africa (Aasa) taking place in Mauritius.
“At the moment SAA’s regional routes are still making money, but there is other competition coming in, which could easily take some of the market share.”
Taneja emphasised that to make money in aviation an airline needs frequency, especially if it wants to aim at attracting business travellers.
“You must balance what value to provide to your customer and you must find a balance with other airlines. There is a saying: If you want to go quickly, you must go alone, but if you want to go far, you must go together,” he said about the importance of partnerships.
“Many carriers in Africa must be rebranded and leadership is needed on the level of government and on the level of management. For this the right management skills are needed.”
In his view the government must be the facilitator in this process and not an obstacle to getting those skills in place.
“There are increasingly powerful competitors in the aviation industry, because of consolidations that have taken place. At the same time consumers – especially younger consumers - and their buying behaviour are changing,” he said.
“This will change the aviation equation considerably. And to think when these low-cost carriers first started the big carriers regarded them as a joke,” said Taneja. “Now some of them are even starting their own low cost airlines.”
He said it is important for airlines to stop focussing only on cost and put revenue in the spotlight.
“Costs have been coming down for the past 40 years, but revenues as well, because of increasing competition. Airlines must rather look at what customers want and not just think about selling a seat.”
“The opportunities in the aviation industry in Africa lie in forming partnerships. Kenyan and Ethiopian Airlines are growing, while it is questionable whether SAA can manage the same,” he said at the 44th annual general meeting of the Airlines Association of Southern Africa (Aasa) taking place in Mauritius.
“At the moment SAA’s regional routes are still making money, but there is other competition coming in, which could easily take some of the market share.”
Taneja emphasised that to make money in aviation an airline needs frequency, especially if it wants to aim at attracting business travellers.
“You must balance what value to provide to your customer and you must find a balance with other airlines. There is a saying: If you want to go quickly, you must go alone, but if you want to go far, you must go together,” he said about the importance of partnerships.
“Many carriers in Africa must be rebranded and leadership is needed on the level of government and on the level of management. For this the right management skills are needed.”
In his view the government must be the facilitator in this process and not an obstacle to getting those skills in place.
“There are increasingly powerful competitors in the aviation industry, because of consolidations that have taken place. At the same time consumers – especially younger consumers - and their buying behaviour are changing,” he said.
Nawal Taneja, leading airline analyst speaks at #AASA AGA pic.twitter.com/EHw7C0Ck1m
— MAUREVA (@Maureva) October 31, 2014“This will change the aviation equation considerably. And to think when these low-cost carriers first started the big carriers regarded them as a joke,” said Taneja. “Now some of them are even starting their own low cost airlines.”
He said it is important for airlines to stop focussing only on cost and put revenue in the spotlight.
“Costs have been coming down for the past 40 years, but revenues as well, because of increasing competition. Airlines must rather look at what customers want and not just think about selling a seat.”
#Airlines have reduced cost but also revenues over the years... Think @Maureva to maximize your revenues! pic.twitter.com/PRmaTOB4S6
— MAUREVA (@Maureva) October 31, 2014
