Domestic travellers aren’t likely to see airfares come down, even if new carriers should enter the market.
This is the word from Erik Venter, Chief Executive of Comair, who says a drop in airfares would not be sustainable.
Comair is expecting its profits to double when it announces its financial results this week. The airline indicated last week that earnings per share and headline earnings per share for the six months ended December 31, 2013 were expected to be between 32 and 35 cents per share. Comair’s EPS for the same period in the previous year was 16,4 cents, when the company generated R262 million.
Fastjet has vowed to bring down domestic fares if the airline succeeds in entering the South African market. CEO, Ed Winter, says the current duopoly created by SAA and Comair is keeping airfares at an all-time high. “Prices went up by 35% after 1time fell. Fares are higher than they need to be and, in peak season, capacity is not there. For the South African consumer, a third airline would be a huge benefit.”
However, Venter strongly disagrees: “Of course every start-up airline makes a lot of fuss about how it will sell cheaper tickets but the reality is that it is just not possible.”
From : Tourism Update