LCC competition boosts domestic traffic growth

South African aviation may still be dominated by its flag-carrier (South African Airways) and its major gateway (Johannesburg), but in recent years both the domestic and international markets have seen strong growth. The latest quarterly data provided by ACSA for the period April to June 2007 shows the major role that Johannesburg continues to play.

Chart: South African Airport Traffic - 2007 Q2
Source: ACSA

In 2006, Johannesburg (JNB) catered for 17.33 million passengers (up 8.8%), ranking it 75th among world airports. It was the biggest airport in South Africa for domestic, regional (other parts of Africa) and international traffic. In the first half of 2007, domestic traffic is up 16.3% and international traffic up 10%, suggesting that around 19 million passengers will be handled this year.

A closer look at the recent trends in JNB’s domestic traffic shows the accelerating rate of growth witnessed since the launch of low-cost carriers in the country. Kulula was launched by Comair in 2001 and was followed by 1time in February 2004 and SAA’s own LCC Mango in November 2006.

Chart: Johannesburg domestic passengers
Source: ACSA

On the key JNB to Cape Town (CPT) route, Kulula now operates up to 16 daily flights, while 1time and Mango each operate six daily departures. Not surprisingly, SAA still dominates the domestic market as a whole but not as much as it once did.

Airline Frequency share Capacity share Aircraft size
SAA 60.8% 48.2% 86 seats
British Airways (Comair) 10.0% 12.0% 130 seats
Kulula.com 8.4% 11.6% 150 seats
Mango 5.5% 9.5% 186 seats
1time 5.8% 8.4% 157 seats
Nationwide 7.9% 8.4% 115 seats
Others 1.6% 1.9%
Source: OAG Max Online for w/c 17 September 2007

International traffic has also shown steady growth but has not benefited from the same kind of stimulation as the low-cost carriers have generated in the domestic market. A closer look at international traffic at JNB shows steady growth of between 4% and 9% in each of the last six years.

Chart: Johannesburg international passengers
Source: ACSA

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