South African Airways (SAA) has announced a code share agreement with Air China that will complement SAA’s newly inaugurated non-stop service between Johannesburg and Beijing, introduced a month ago.
Both airlines, which are members of Star Alliance, will introduce code-share services on the main route (Johannesburg-Beijing-Johannesburg) that was launched by SAA on January 31, the airline announced yesterday.
The agreement calls for SAA to offer flights with the SA code on Air China-operated flights between Beijing and Shanghai. Air China will in turn be able to offer flights with its CA code on SAA’s service between Beijing and Johannesburg. In addition, SAA Voyager members will earn miles for flying on the SA-coded flights between Beijing and Shanghai. The new flight options will be available for booking and purchase from February 28, for travel as of March 1.
“The introduction of aviation links between nations nurtures economic activity, with domestic and regional benefit within the Southern African Development Community (SADC) expected to pay dividends both in terms of trade and tourism,” said SAA CEO Siza Mzimela.
“This code share agreement with Air China is meant to facilitate those benefits for both African and Chinese interests, as well as for other growing economies, such as Brazil, which now has easy and convenient access to China through SAA’s service.”
Wang Mingyuan, Senior Vice President of Air China said, “Air China always takes passenger-oriented service policy, and endeavours to provide safe, fast, convenient and satisfactory air transport services to our customers. I believe that through joint efforts with South African Airways, we will provide more choices and high quality services to the public travelling between China and South Africa.”
“SAA is proud to implement this code share agreement with Air China, which offers our customers added connection opportunities and convenience, allowing for seamless travel to China’s main business centres,” added Mzimela. “Customers of both airlines will benefit from the options to travel between two burgeoning economies with two airlines that offer outstanding service within their respective markets.”
SAA launched its first-ever non-stop flight from Johannesburg to Beijing on January 31. It was the first of three new weekly flights between South Africa and the Chinese capital.
Meanwhile on the African continent, SAA is strengthening its networks in Central African, having introduced flights to Pointe Noire in the Republic of the Congo from January 26. SAA flies to 21 cities on the continent with the commencement of the Pointe Noire service.
Pointe Noire, the economic capital of the Congo, is SAA’s fourth new destination on the continent for the 2011/12 financial year, joining Ndola (Zambia), Kigali (Rwanda) and Bujumbura (Burundi) as the airline’s most recent additions to its expansive route network in Africa. In the next six months three more routes will be added, including one to Benin.
“Air access is increasing in Africa and, with more access, there is more competition. There is a lot of stimulation in the sector,” said Theunis Potgieter, GM: Commercial at SAA. “The growth in Africa is in double digits and a lot of that is South Africans flying to do business on the continent.”
Africa’s economic growth as well as investment from overseas countries, notably China and India, is driving competition in the domestic aviation industry, but a saturated market is causing many South African carriers to look outside the country’s borders for new opportunities.
“The local market is saturated and I think it is specifically in the low-cost segment where the bloodbath is,” said Rodger Foster, CEO of SA Airlink, which flies to 28 Southern African destinations. “The low-cost segment is becoming really tough and the consequence is that local operators are looking beyond SA,” Foster said. “They have to look for additional revenue streams and this is one of the key drivers of growth into Africa.”
Chris Zweigenthal, CEO of the 17-member Airlines Association of Southern Africa, said that, “Africa is ripe for growth and it will be one of the regions with the highest growth rates in a year that is going to be very challenging for the industry worldwide.”
Earlier this month SAA asked the government for between R4 and R5 billion to replace its short haul fleet of Boeing 737-800s over the next five years. Mzimela said the investment and new aircraft would enable SAA to “make massive savings on its jet fuel bill while providing better and more frequent connections to key destinations”.
SAA plans to increase its fleet from 24 to 31 more fuel-efficient Airbus A320s.
The requested funds for new aircraft is in addition to the R1.3 billion subordinated loan SAA already had from the government, Business Day reports.
Last year the carrier reported a net profit of R782 million for the year to end-March 2011, although “would probably be in a loss situation” in the 2011-12 financial year to end-March, according to The South African.
Mzimela said that SAA was currently facing “the same challenges as all global airlines through increasing pressure on margins and greater competition”.