TRANSPORT: Mango Cut Fares in Line with Lower Fuel Prices
Recent Western Cape Business News
Low cost airline CEO Nico Bezuidenhout is upbeat about the outlook for aviation this year and, in particular, Mango whose 95% average load factor over the festive season bucked the downward trend in domestic travel. He also announced that his airline will cut fares by up to 14% in line with the current favourable fuel price, despite a weak Rand. The price cut represents the current median favourable margin between crude prices and currency levels.
“Wherever possible we will lead the market,” says Bezuidenhout, “passing on cost benefits to travellers in line with our mandate of making air travel more affordable.” Mango demonstrated unparalleled success in delivering sustainably affordable flight since its launch in 2006. “Success in aviation depends on fuel efficient aircraft, operational efficiencies and an effective channel distribution strategy; a formula we follow closely while managing our business as close to our guests as possible.”
It is this formula that Bezuidenhout maintains has laid Mango’s foundation for a positive 2009. In a shrinking market, competition is expected to be fierce between carriers, but he believes Mango is well positioned to continue leading the market. “Consumers will ultimately benefit from increased competition,” he says, “ and for aviators the next 2 years will present huge opportunities for growth and revenue.” He says that the host of international sporting events lined up until 2010 could serve as an additional growth point that would ease the medium term decline in domestic travel.
2008 was one of the most challenging years in global aviation, he says, with a ripple effect highly evident in South Africa. “We have seen the demise of airlines globally and, in South Africa, we also lost an airline last year. Overall travel numbers are down. But I believe that this will be temporary in a cycle where it is prudent to take a long term view of one’s business.
In such a volatile market it is important not be swept away by sentiment, but to focus inward and optimize a business, build a position of strength that anchors a company in a challenging environment.”
Furthermore, he says, Mango remains poised for growth but prudent fiscal management in the current climate will dictate expansion plans. “In tougher times, business decisions become hypercritical and growth should be nurtured within current structures and asset bases. Effective utilization of aircraft and business resources along with a single minded focus should continue to lay a foundation for Mango’s upward ambition.” Already the airline achieves with its fleet of 4 aircraft similar results as competitors with much larger fleets.
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