Velvet Sky Aviation, the new kid on the low-cost airline block, was officially launched yesterday and its first commercial flight will take off on Tuesday.
However, details of the shareholders behind the airline are still sketchy.
The airline, which will compete with kulula.com, Mango and 1time, said yesterday that besides price, it would differentiate itself by adding a personal touch to its customer service, such as recognising travellers’ birthdays and loyalty.
The majority shareholder is Macdonald Holdings, a diversified private company owned by Cecil Reddy, which has been operational since 1970. But the company would not say how big a stake Reddy’s group held.
Reddy’s company has more than nine divisions across Southern Africa. He has more than 40 years experience in the steel and engineering fields.
The company also does truck body manufacture and it employs more than 700 people. Macdonald Steel bought Denel Engineering five years ago.
The airline is the brainchild of Dhevan Pillay, who is one of the minority shareholders and the only director registered with Companies and Intellectual Property Registration Office under Velvet Sky Aviation. Again, there is no information on how much of the company Pillay owns.
Pillay, the chief executive of Velvet Sky, has been in the retail industry for the past 18 years.
He owns a chain of photographic retail outlets throughout Durban. He has interests in a music retail store and specialises in commercial property. His annual turnover is in excess of R20 million.
Reddy, the chairman of Velvet Sky, said the group did not want to disclose the breakdown of the shareholding because it did not want the minority shareholders to feel bad.
Another response was: “Velvet Sky is a private company and therefore there is no need to do so.”
Gary Webb, the chief operating officer, said Macdonald Holdings owned more than 75 percent of the company and the remainder was held by individuals, including Pillay.
The airline also refused to disclose the quantum of its initial investment. Webb said getting an airline off the ground cost more than R20m.
Reddy said: “We have not borrowed any funds to start up the airline.”
Velvet Sky will fly the golden triangle route between Cape Town, Johannesburg and Durban. Reddy said it would focus on the local market for about a year before looking at the rest of Africa. Research indicated there was a hike in air commuting and people were starting to take more frequent but shorter holidays, he said.
These and other market-related factors created demand for another airline, he said.
According to the International Air Transport Association, African carriers were the only ones to show an increase in air travel growth rates from October (12.6 percent) to November (16.4 percent). Africa’s carriers moved 11 percent more travellers in November than they did at the prerecession peak in early 2008.
The Civil Aviation Authority confirmed that Velvet Sky had been issued with the requisite air operator certificate effective yesterday, which authorises the operator to conduct commercial air transport.
Hein Kaiser, the communications manager at Mango, said the company welcomed the competition because it would be good for the consumer. - Business Report