Daily News Articles for the Transport Sector, 2008

September 14, 2007, Business Report

Is Mango's new Top Blass service, which is apparently aimed at the small and medium business market, merely the first step in a strategy aimed at letting SAA's low-cost airline take over its parent's entire share of the domestic market - thus leaving the full-service airline free to fly the international market?

Or is it the start of Plan B - leading to a leaner, more cost-effective national carrier based on Mango if the business plan to turn SAA around does not succeed?

According to Mango's website, Top Class fares are well below the minimum economy fare charged by any of the full-service airlines. They include use of a lounge, meals, a bigger baggage allowance and - the main advantage for business travellers - flexibility to change flight times without penalty.

Mango's decision to compete directly with SAA in the domestic market has puzzled many people - but allowing it to take over the domestic business would make sense.

Mango's management includes executives who were with SAA before its current difficulties. They have experience in running a full service international operation.

There is a similarity between this situation and the bankruptcy of SAA's former strategic equity partner, Swissair. Swissair's domestic operation and its most profitable international routes, including that between Zurich and Johannesburg, formed the business basis of the successful new national carrier, Swiss International Airlines.

Shall we see the same situation here? Or is the launch of Mango's Top Class merely a warning to the unions with which SAA is negotiating to cut down its workforce, and reduce the cost of working conditions and perks?