Airlines have cut fares by about 40% on the Harare-Johannesburg route as competition intensifies, with analysts warning that a knee-jerk reaction by any carrier could come with disastrous consequences.
The route is now being serviced by five airlines — South African Airways, British Airways (through Comair), South African Express, fastjet Zimbabwe and Air Zimbabwe.
Aviation experts said last week the battle of the skies would have casualties if any airline followed the bandwagon and cut fares without addressing the cost structure.
“Low-cost airlines have a different business model. They do online bookings, they charge for the luggage and food,” one of the experts said.
“Traditional airlines should compete on quality of service as they cannot go for price wars because their cost base is different from low-cost airlines. They should reduce associated costs of providing the service.
“How do you provide a service at a loss?”
The expert said airlines, whether traditional or low-cost, incurred the same operating costs such as fuel, landing fees and crew.
Low-cost airlines, he said, had to operate on high-density routes and had to be full all the time to break even.
On the other hand, traditional airlines can break even at 60-70% passenger load, the expert said.
On Monday, low-cost carrier, fastjet Zimbabwe launched its pan-African expansion with a maiden flight to South Africa.
A one-way ticket costs $80 (excluding departure tax of $50 when flying from Zimbabwe and $35 when flying from South Africa).
National carrier Air Zimbabwe has come up with special offers that will see passengers buying a one-way ticket from Harare to Johannesburg for $130, excluding tax.
South African Airways has a promotional fare of $397 (return ticket) as and when seats are available.
Returning low-cost airline flyafrica.com has announced a welcome back fare of $20 on one way trips excluding tax.
“We are glad to be back in the skies and we have slashed our prices! Fly the original low fare airline and take advantage of this special offer today,” the airline said on Friday.
Fastjet Zimbabwe director of Flight Operations Ed Lanca, said since last week fares on competing airlines flying between the two countries had dropped by as much as 40% since the low-cost airline announced plans to service the route.
“The fact is that competition is good for consumers. It brings choice and it brings air fares down,” says Lanca.
Low-cost airlines are targeting cross-border traders who normally use road transport to South Africa, with fastjet Zimbabwe saying 40% of its passengers were first-time fliers.
Other than fares, airlines compete on punctuality.
“In the past Air Zimbabwe was flying a Boeing 707 plane to London and competing with British Airways that had a Boeing 747.
“Air Zimbabwe was always full and making money because it was punctual and reached London ahead of schedule,” another expert said.
He said low-cost airlines had to be competitive to stay in the game where others had folded.
“South Africa has a population of more than 50 million and some low-cost carriers such as 1time have folded.
“The two big low-cost players Mango and Kulula are cushioned in that they are subsidiaries of South African Airways and Comair respectively. It’s cold up there,” the expert said.
Until the entry of the new low-cost airlines, Air Zimbabwe had a virtual monopoly on domestic routes and its high prices made flying a preserve for the rich.