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By Reuters 
9h ago
Johannesburg – A new South African national airline launched on Wednesday, betting on low operating costs and oil prices to weather an industry crisis that has left the national flagship SAA struggling to survive and sunk other low-cost carriers.
The new airline, Lift, partially founded by former Uber Africa executive Jonathan Ayache and Gidon Novick, who ran low-cost flyer kulala.com, said it planned to avoid a cash-intensive operating model that would hit rivals.
“We are fortunate, operating costs are as low as ever. Obviously that is subject to the exchange rate,” Novick said.
“Oil prices are quite low. Aircraft values have been cut by almost half and personnel costs are also low, so we see a real opportunity.”
The rand is at its strongest in 10 months against the dollar. Global oil prices plummeted to a two-decade low in April, and only recently returned to pre-Covid-19 levels near $ 50 a barrel.
Lift will fly fourth-generation Airbus A320 aircraft leased from Global Aviation Operations, a South African-based charter company. All Lift seats will be inexpensive and will operate between the Johannesburg shopping center and tourist favorite Cape Town.
It will compete directly with South African Airways state affiliate Mango, market leader kulala.com and FlySafair, among others.
Like their global peers, they have struggled this year due to the Covid-19 pandemic, related lockdowns, and travel restrictions.
The health crisis exacerbated SAA’s problems. He entered the business rescue, a local form of bankruptcy protection, last December after nearly a decade of financial losses.
Comair is also in business rescue while SA Express is in liquidation.
On Tuesday, the International Air Transport Association said passenger demand continued to disappoint. African airline traffic plunged 78.6% in October from an 84.9% drop in September.
Lift, however, is betting on the return of tourists and business travelers, and what it sees as historically lower entry costs. Lift did not say what number of passengers it was addressing.
Reuters
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