SA Aviation domestic market returns to nearly 80% of pre-pandemic benchmark figures - FlySafair

The South African domestic passenger aviation market was showing signs of recovery and stabilisation, as available seats on the domestic market have returned to nearly 80% of the pre-pandemic 2019 benchmark figures, according to FlySafair.

The airline's Chief Marketing Officer, Kirby Gordon, said while a return to 100% would be welcome, the current figures signified the market's renewed equilibrium.

Gordon said this should be a pro-consumer period as more seats in the market means that prices would not be as high as they were on average. He added that constrained incomes meant that demand may not rise as high as it otherwise would have. These things would then keep prices lower, he said.

He said several factors that were influencing this stabilisation include weakened national economic performance, high unemployment rates, and the rising cost of living for consumers, coupled with increased interest rates.

For airlines, operational costs have soared due to higher fuel prices and the fluctuating rand-dollar exchange rate.

Commenting on the current market scenario, Gordon said the aviation industry has indeed witnessed significant changes over the past three years, with some brands bowing out. ‘’However, today's market remains just as competitive with five companies, each operating a single brand,’’ Gordon said.

“Despite some turbulence, the market supply has been adequately addressed by current players, ensuring that there isn't an upward price trajectory due to seat under-supply,” he added.

According to the airline, the industry's present status quo was evident, as during the low season, particularly in months like May and August this year, airlines offered attractive deals, signifying a return to business norms.

It said for consumers, this translated to reasonably priced and sustainable domestic flight options. ‘’Price levels may never return to their 2019 standards due to changing dynamics, especially concerning fuel prices and the rand/dollar exchange rate. However, the current price structure is both fair and sustainable.’’

Airlines were said to be now re-evaluating their market positions, with operating costs per seat becoming more significant. Full-service carriers, known for their added amenities like complimentary luggage, seat selections, loyalty programmes, and meals, need to offer real value to justify their price points.

Gordon said FlySafair remained one of the low-cost carriers in the local market and was committed to that operating model. “We’ve always aspired to provide a hassle-free, punctual, and affordable option," said. "Our primary goal is to concentrate on an excellent basic service that consumers can enhance with optional extras according to their preferences.”

In June this year, FlySafair was once again awarded Best Low-Cost Airline in Africa at this year’s Skytrac World Airline Awards, making this the third win in a row for the South African airline.

Gordon said as the country moved from winter to spring, consumers would undoubtedly turn their minds to plans for the much-awaited annual summer holiday season. ‘’With the market back at equilibrium, the traditional airline booking advice remains sage: Book early to get the best fares.’’

According to Statista Market Forecast, Revenue in the South African flights market was projected to reach €1bn this year. Revenue was expected to show an annual growth rate (CAGR 2023-2027) of 4.13%, resulting in a projected market volume of €1bn by 2027.

In the Flights market, the number of users was expected to amount to 4.5m users by 2027, while user penetration was projected to be 6.1% in 2023 and 7.2% by 2027.

The average revenue per user (ARPU) was expected to amount to €294.60.

In the Flights market, 92% of total revenue would be generated through online sales by 2027.

In global comparison, most revenue would be generated in the United States (€123bn in 2023).

BUSINESS REPORT