A NEW commercial joint venture between SAA and Air Mauritius is “an exciting, major step forward in the evolution of the relationship” between the two airlines, says SAA Spokesperson, Tlali Tlali. He was responding to a question by TNW if this was the first step in an even closer relationship between SAA and Air Mauritius, such as an equity partnership.
He says the plan is to launch the JV during the course of 2020. “The teams at both airlines will be working together over the coming months.” This follows an exemption in terms of Section 10 of the Competition Act granted to SAA and MK on October 24 by the Competition Commission for a JV on the JNB-MRU route “and other related routes” for a period of five years, citing as a primary reason the promotion of exports from South Africa.
The CompCom says, in addition to an existing codeshare on the route, the JV allows SAA and MK to “collaborate on network scheduling, revenue management and distribution; and to align their economic incentives by pooling their revenue and costs on JNB-MRU and the behind and beyond destinations”. This means that the JV includes connecting flights beyond Johannesburg and Mauritius on the two companies’ respective networks, confirms Air Mauritius.
“Under this agreement, Air Mauritius and SAA will be able to develop passenger and cargo capacity across their joint network. The two airlines will also be able to align their schedules in order to provide better choice and flexibility to passengers through seamless connections beyond Johannesburg and Mauritius,” it says in a statement.
Tlali confirms it allows the carriers to promote each other's networks and improve connections and customer service beyond their respective hubs. He says SAA will continue to operate its own aircraft on the trunk route, in co-ordination with MK aircraft. Approached for comment, Comair joint CEO, Glenn Orsmond, points out that SAA and MK already hold 96% of the market share on the JNB-MRU route, with BA Comair only 4%. “Any pooling of resources can only be anti-competitive,” he says.
“Fair competition is good for commercial aviation and good for consumers. We’ve never shied away from it. If we feel competitors are behaving unfairly, we will act,” adds joint CEO, Wrenelle Stander. Meanwhile, World Leisure Holidays MD, Ramesh Jeenarain says the JV should give passengers access to benefits offered by both carriers, such as more flexible flight timings, using Air Mauritius’s Travel Smart programme and the availability of last-minute upgrades.
“The carriers will also be able to increase capacity on the route during high demand periods as there will be more aircraft at their joint disposal. If they maintain affordable prices, it will make the route attractive to more travellers and positively benefit all parties, including travel agents and tour operators,” he says.
A precedent The “landmark” CompCom decision “sets an exciting precedent and opens many doors to inter-airline connectivity”, says Airlink CEO, Rodger Foster. He says it’s an opportunity for Airlink to work more closely with SAA and to align with its extended network. Foster speculates that the first likely outcome will be a double-daily wide-body service between JNB and MRU offered between SAA and Air Mauritius.
“The second will be that SAA’s network will extend beyond MRU and will likely include destinations in India and Southeast Asia via MRU. The exciting part will be that Airlink’s 55-point network will be open for business in terms of interline interconnectivity via JNB and MRU to destinations beyond MRU and that will be a big opportunity for Airlink’s customers,” he says