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A new airline is preparing to launch flights in South Africa next week, entering the industry at a time when airlines near and far are going bankrupt amid the worst crisis in aviation history.
Lift, owned by Johannesburg-based leasing company Global Airways, will operate three Airbus SE A320 jets and look to tap into domestic demand that is returning after a nearly five-month ban on interprovincial travel to contain the Covid-19 pandemic. The airline is looking to take advantage of falling startup costs due to a glut of idle jets and low oil prices, according to co-founder Gidon Novick.
“The opportunity is here now to enter the consumer airline space, especially given the current environment,” Novick said in a telephone interview.
“Current cost structures are about 40% lower than what it would have cost to start an airline before the coronavirus.”
As European airlines struggle to stay afloat during the slower winter season and a resurgence of Covid-19 cases, Lift will begin flying at the height of the South African summer and just as millions of people travel to resorts and family homes. for the festive season. . Competition has also been reduced slightly with the grounding of South African Airways, which has been under bankruptcy protection for a year.
Lift’s first flight is scheduled for December 10 and the airline will connect Johannesburg with Cape Town and George, a small coastal city in the middle of the Garden Route, a popular area for tourists.
Slow revival
South Africa’s national aviation industry was hit by the pandemic but is now slowly coming back to life.
State-owned Mango and nearby FlySafair are back online, while Comair left administration and resumed flights on December 1. Kulula brand operator and local British Airways partner won backing from investors and lenders in September.
“There is an oversupply of aircraft, as many have been returned to lessors or sold,” said Novick, former Co-CEO of Comair and founder of the tourism investment group Lucid Ventures.
“There are a lot of highly trained people available right now, this also influences supply and demand, and there is the use and availability of the maintenance infrastructure.”
At risk for Lift and more established carriers is the potential for a resurgence of virus infections, and strong increases have been reported in two coastal provinces. President Cyril Ramaphosa issued a warning about the increase in a speech Wednesday night and announced new restrictions for a particularly severe access point around the city of Port Elizabeth.
“Many think it’s crazy to start an airline these days,” Novick says on the Lift website. “We think this is the best moment ever.”
© 2020 Bloomberg LP
