Johannesburg - Low-cost cost airline Mango will add two new generation Boeing 737-800 aircraft to its fleet this year.
The airline will operate 10 aircraft between eight airports, representing capacity growth of 15 percent and network growth of 100 percent since its launch eight years ago. The new aircraft will be deployed, one at a time, at the end of October and November across Mango’s existing network.
Chief executive Nico Bezuidenhout said that new routes are in the offing. “The domestic market is near saturation in terms of carriers while few routes remain available that we do not operate already.”
He added that the airline is in the process of reviewing several regional destinations at this time with the likelihood of another East African seaboard route. “Domestically we are reviewing options too, but at present it makes competitive sense to bulk up on our existing schedule.”
Mango’s approach to growth has been consistently prudent, says Bezuidenhout.
“In a market where capacity and demand are out of sync and competition extreme, our capacity discipline, investment in continual research and strong business case considerations have paid dividends.”
Since its launch in 2006, Mango has been consistently profitable in six out of seven full completed fiscals. The carrier has also invested substantially in access to affordable airlift services, paired with innovation; it now holds the largest distribution network of any local airline.
Mango now carries more than 200 000 travellers each month.
Bezuidenhout says he expects another start-up to enter the market before the middle of next year.
“The introduction of a second new airline in the domestic market will exhaust the sector,” he says.
“The market has contracted substantially since 2008 and, with margins under pressure again this year, the sector cannot sustain more capacity on obviously popular routes such as Johannesburg-Cape Town and Johannesburg-Durban.”
Bezuidenhot added that while below-cost fares feed airline launches, they would be impossible to sustain.
“The environment before the global financial crisis proved far more conducive to airline startups,” he said.
“Today, given capital scarcity and increased competition, an investment proportionately greater as was required a couple of years ago may be necessary to sustain an airline well beyond its launch.
“Even with the lowest cost base in the industry, Mango’s consistent profit history was not easily achieved.” said Bezuidenhout.