TRAVEL NEWS WEEKLY

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SOUTHERN AFRICA’S TRAVEL NEWS WEEKLYMarch 9 2016 I No. 2389

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FEATUREGERMANY & AUSTRIA

How to sell budget-friendly packages

Page 8

REPORTAMADEUS AWARDS

All the winners

Page 2

NEWSSAA, SAX MERGER

What does it mean for SA aviation?

Visit AgentConnect.biz your dedicated website.

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This is the historic first four-ball who teed off to start Travel Industry Golf in KZN. The chairman of TIGC, Jose Cruz, officiated and urged the KZN industry to make a special effort to help the new fledgling branch establish itself. Sponsor, Bidvest Insurance, and organiser, Donovan Moodley, from Serendipidty Tours, were on hand to see the first group off. From left: Shaun Shunmugan (Rennies Travel); Donovan; Marco Christofoli (Harvey World); Marvin Gabriel (Overseas Visitors Club); and Ryan Cronje (Bidvest). Contact donovan@serendipity.co.za to go on the mailing list for future games. Photo: Dave Marsh

Travel golf tees off in KZN

Cruise agent in hot waterDarise Foster

LOCAL Afrikaans magazine for married couples, Intiem, is

considering legal action against Annemie Raath, owner of Bucket List Reise, after the agent allegedly failed to pay for 22 cabins on its annual themed ‘Intiem Cruise’ for readers, leaving passengers stranded.

TNW received complaints from disgruntled passengers who said they had paid for the cruise in full – including flights to Durban, transfers to the ports, drinks packages etc. – but were informed by Annemie the day before the cruise that they were not booked on the cruise because their cabins had not been paid for.

Liezel van der Merwe, managing editor of Intiem, told TNW the agent had initially claimed that payments were not fulfilled

due to an administrative error on MSC’s part. The cruise line has denied this. “There were a total of 300 Intiem passengers who were processed through MSC who cruised without incident,” MSC Cruises marketing and sales director, Allan Foggitt confirmed.

“MSC became aware of the problem on the day before the cruise departure as some passengers contacted us directly to advise they had not received their cruise tickets from Bucket List Reise,” Allan said. The 22 cabins, which had been booked by Bucket List Reise, had been cancelled on December 4 due to non-payment, which was due 60 days prior to departure.

“We had originally received a R3 000 deposit per cabin. It appears that passengers subsequently paid the agent the balance of the fares, however these were never forwarded to MSC,” said Allan.

On the day before the cruise, MSC had contacted Annemie to advise her that the affected cabins could be reinstated if the payments were made, said Allan. “After promising to make good, she

To page 2

Agents summoned by Competition CommissionDebbie baDham

TRAVEL agents have been summoned to present information to the South African Competition Commission as investigations into Emirates’ trade override deals intensify.

The Commission’s complaint against Emirates dates back to April 7 last year when a complaint was initiated

against Emirates Airline for alleged contravention of certain sections of the Competition Act. “The Commissioner alleges that Emirates offers incentives to travel agents to increase ticket sales on any of its destinations outside South Africa. The first aspect of the complaint stems from allegations of Emirates offering certain travel agents economy-class tickets to Dubai for

achieving a minimum of 10% growth in Emirates sales,” the Commission told TNW in a statement last year.

“The second aspect relates to a ‘switchON’ incentive through which Emirates allegedly offers travel agents a 20% discount in respect of passengers switched from competing flights to Emirates flights.

To page 16

“It appears passengers subsequently paid the agent the balance of the fares, but these

were never forwarded to MSC .”

2 n Wednesday March 9 2016 QUICK READ FOR DECISION-MAKERS

NEWS

Rubes® By Leigh Rubin

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Top web stories

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“Rule No. 1: Keep both paws on the wheel and your head out the window.”

SAA, SAX merger on the cards SAA amends closing time for local flights Pound takes a tumble over ‘Brexit’ fears Tourvest launches new brand Monday smile: Dude, where’s your wife?

SAA, SAX merger – what does it all mean? The merger with SAX and a potential minority equity partner are on the cards for SAA in the near future. What would this mean for the South African aviation landscape? Dorine Reinstein reports.

DURING his budget speech, Finance Minister, Pravin

Gordhan, said a possible merger between SAA and SA Express would create a bigger and more operationally efficient airline.

June Craword, Barsa ceo, says a merger between the state-owned carriers makes good sense. “SAA, Mango and SAX routes should be rationalised. They should not be competing but rather complementing each other. This way all stand to win.”

Although a good move on the part of the airlines, a merger would have limited impact on the South African aviation landscape, says Chris Zweigenthal, Aasa ceo. He explains that, as SAA and SAX currently operate on very different routes, a merger would be unlikely to disrupt the industry.

A merger would extend SAA’s reach and dominance through direct control of smaller routes in South Africa, currently operated by SAX, says aviation analyst, Joachim Vermooten. “It would inhibit entry and expansion on smaller routes by smaller private-sector airlines. SAA and SAX could internally co-ordinate prices and supply of capacity, exclude or foreclose other private-sector airlines from interlining, resulting in a reduction of choice.”

“Unless the change resulting from the merger can be implemented quickly, such that the resultant business is agile and competent, there will be an opportunity for other operators to gain more traction in the local markets,” says Rodger Foster, ceo of Airlink.

Rodger adds that merging SAX and SAA will bring about a single state-owned enterprise airline, which will lead to much-needed stability. However, he warns that bringing two financially unstable businesses together will also naturally result in bigger losses. “It is probable that the combined entity will need to shrink into sustainable viability before it can afford to stretch its wings and grow into new horizons.”

Who will invest? Who would want to invest in cash-strapped SAA as a ‘minority partner’?

The challenge is that as long as SAA continues

making losses it will remain unattractive and the order of magnitude of its debt is a deterrent to a prospective minority strategic investor, says Rodger. “SAA’s business can be fixed, but in order to do so it needs stability and a clear strategic direction.”

A minority shareholder doesn’t necessarily need to be silent and sit back, says Chris. KLM, for example, became a minority shareholder in Kenya Airways and managed to completely turn the airline around to make it a huge success. The same is true for the partnership between TAAG and Emirates. Any possible partner for SAA would likely bring the necessary knowledge and expertise to bring the airline back to profitability, he says.

Rodger agrees that there are models where minority investors play a more significant role in the management of the business. As such, the Middle Eastern carriers could be potential equity holders for SAA. However, Rodger points out that these carriers have already permeated the Southern African markets by having access to multiple cities directly from their hubs. “So why would they wish to invest in the local airline network system comprising financially challenged entities?” n

Cruise agent in hot water

disappeared and we were left to try accommodate the passengers without reservations in whatever cabins were available at the harbour on the day.” The passengers had been required to pay an additional amount, although it had been largely discounted, said Allan.

The cruise line has since suspended Bucket List Reise’s agency code with immediate effect.

When contacted by TNW and asked why payment was not made, Annemie said: “The only thing I can tell you is we, together with my lawyer, are busy with our own investigations.” She

added that some clients had been refunded and the agency was in the process of completing other refunds. “Posts on social media claim that we ran away. This is definitely not the case. As things stand now, we will not continue business.”Intiem magazine and at

least two other affected passengers, have since sent formal letters to Annemie from their lawyers explaining their legal positions.

“We will quantify in due course the damages incurred resulting from the state of affairs, whereupon we intend to hold Annemie liable for damage to our name and business reputation. We have also

incurred damages resulting from a loss of commissions and other entitlements under the circumstances, all of which will also be claimed.”

As a gesture of goodwill, MSC has offered affected passengers a free cabin on its March 14 departure. “While MSC is not legally liable for the bookings and payments made by those passengers who booked through Bucket List Reise for the Intiem Themed Cruise, we nevertheless understand and sympathise that this unfortunate state of affairs has caused a great deal of distress on the part of those affected passengers,” said Allan. n

From page 1

“A merger would extend SAA’s reach

and dominance through direct control of smaller routes in

South Africa, currently operated by SAX.”

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4 n Wednesday March 9 2016 QUICK READ FOR DECISION-MAKERS

NEWS

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Email : alljnbetctostaff@ethiopianairlines.comTel: 011-326-1190

www.ethiopianairlines.com

Helen Johnston selects the top specials from Travelinfo

Pure Skiing. Seven-night package in Italy from R13 880pp sharing. Rate includes accommodation at the Livigno Hotel Bernina in a double room with breakfast daily, six-day ski pass and hire (boots, poles and skis), accessory, ski guiding, 10 days’ Zurich Travel insurance. Excludes flights and taxes. Travel dates April 9-16. Air Holidays. Victoria Falls package from R6 105pp sharing. Rate

includes return flights from Johannesburg, cross-border transfers, three nights’ accommodation at A’Zambezi River Lodge with breakfast and dinner daily, sunset cruise and a guided tour of the Falls. Offer excludes taxes of approximately R2 770pp. A $10 (R160) park fee for the cruise and $20 (R319) Falls entry to be paid directly. Valid for travel until April 30. Perfect Destinations. Vietnam highlights tour from R19 500pp

sharing. Rate includes return flights from Johannesburg (including taxes), domestic flights, transfers throughout, eight nights’ accommodation, including one night on a train, English-speaking guides, air-conditioned coaches and meals as per itinerary. Set tour dates apply. Valid for travel until September 30. Kulula.com (KZN). Winter promo from

R2 341pps. Offer includes return flights from Johannesburg or Lanseria to Durban, approximate taxes and fuel levies, two nights in a standard room at the Protea Hotel Umhlanga, two days’ car rental (group T) with a standard waiver and 200km free per day. Offer valid for travel from April 1 to September 30.

Luxury rail operator snaps up Shongololo Express

ROVOS Rail has purchased the Shongololo Express train

of 19 coaches and has agreed to employ all the personnel.

“Operating a three-star train had always been at the back of my mind and when I learned that the Shongololo Express was on offer, the timing seemed serendipitous,” said owner

and ceo of the Rovos Rail Group, Rohan Vos.

The train has been repainted in green and cream, while an additional dining car and an observation car have been added. The accommodation of six Emerald suites (± 10sqm) and 30 Gold cabins (± 7sqm) will remain as is.

The three itineraries –

Southern Cross: Pretoria to Victoria Falls (12 days); Dune Express: Pretoria to Swakopmund (12 days); and Good-Hope: Pretoria to Cape Town (15 days) – have been rebuilt with more stationary time at night and less road time spent on the excursions.

Golf has been introduced to the Good-Hope trip, renamed Good-Hope Golf, with courses

such as the Arabella Golf Estate, Ernie Els Oubaai, Fancourt, Champagne Sports Resort, Durban Country Club, Zimbali, Royal Swazi and Leopard Creek being available to guests.

All journeys are available in reverse and, as before, guests can purchase optional extras that include visits to cultural, historic or heritage

sites and overnight stays at safari lodges. The rates do not include most lunches, beverages and laundry.

“A three-star product offering will be different for us and I’m sure there will be a few initial teething problems but we’ve been doing this for 28 years so I think we will be able to manage this exciting new adventure,” Rohan said. n

The Seychelles Tourism Board (STB) has officially opened an office in Johannesburg. “The message from the trade was that we needed a presence in the business centre of South Africa and we have listened,” said Seychelles Minister of Tourism and Culture, Alain St. Ange. “This is a commitment from STB, which intends to work more closely with its partners in this market.” The office is in the same building as Air Seychelles, at 280 Oak Avenue in Randburg. Pictured here, celebrating the opening of the office are (from left): David Germain (STB director for Africa); Lena Hoareau (manager for South Africa); Sherin Naiken (ceo of STB); and the Minister, Alain St. Ange. Photo: Natasha Schmidt

You asked, we listened

SAA amends Joburg closing time for domestic flightsSOUTH African Airways has amended its departure closing time for check-in to 40 minutes before boarding on certain domestic flights operated from OR Tambo International Airport, effective April 1. Previously, SAA closed all domestic flights 30 minutes prior to check-in.

The change will apply to flights from Johannesburg to Durban, Cape Town, Port Elizabeth and East London.

“The reason for closing flights earlier is to allow the airline to conclude all departure procedures timeously, especially those relating

to baggage, so that our customers may not be inconvenienced by possibly travelling with their baggage left behind,” says Tlali Tlali, spokesperson for SAA.

The airline said flights would close sooner but that it would not have an impact on current boarding times, which would not be changed.

“We have realised that a significant number of short shipment cases on our domestic sectors emanate from late check-in and we trust that the new measures will go a long way in addressing the situation,” says Tlali. n

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6 n Wednesday March 9 2016 QUICK READ FOR DECISION-MAKERS

NEWS

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SWISS will be ushering in a new era in its long-haul services with its nine new Boeing 777-300ER aircraft. The new twinjets, which will replace part of the present SWISS Airbus A340 fleet, offer 340 passenger seats, a state-of-the-art cabin product in all three seating classes and the key innovation of wireless internet connections aloft. SWISS will be deploying its new Boeing 777-300ERs on routes to Asia, South America and the US West Coast from the Northern Hemisphere 2016 summer schedules onwards.With its new Boeing 777-300ERs SWISS will be setting new benchmarks in terms of

its customers’ inflight comfort and overall air travel experience. The totally-redesigned cabin interior of the new SWISS flagship will offer the highest levels of comfort and aesthetics in all three seating classes. And thanks to its state-of-the-art engines, the new twinjet will also deliver sizeable savings in both fuel consumption and carbon dioxide emissions.

The Boeing 777-300ER: SWISS’s new flagship and its top passenger comfort

swiss.com

SWISS Economy: more comfort and entertainmentWith the new Boeing 777-300ER, SWISS Economy travellers can look forward to maximum inflight comfort, through both greater legroom and new seat-cushion technology. The inflight entertainment will be offered on a large 11-inch personal touchscreen with USB and audio connections. The new SWISS Economy seat also features drinks and smartphone holders. And as a further innovation, guests will be able to obtain a wide range of drinks and snacks from a new self-service kiosk outside the regular cabin service.

SWISS Business: more privacy and personal spaceTravellers in SWISS Business on the new Boeing 777-300ER will find a product that has been further developed and refined on the strength of customer feedback. The modular seating configuration, with its combination of double and single seats, offers maximum privacy and freedom of movement. And, as at present, the Business Class seat can be swiftly transformed into a lie-flat bed that is over two metres long, while the firmness or softness of the seat cushion can be individually regulated. The new SWISS Business cabin also offers greater privacy, more space to stow personal belongings and a new easy-to-handle table.

SWISS First: more privacy and individual discretionEvery seat in the SWISS Boeing 777-300ER’s First Class cabin can be easily transformed into a private suite that includes a personal at-seat wardrobe and more stowage space for the guest’s belongings. The electro-mechanical window shades can be operated simultaneously for all three windows in the traveller’s seat zone; and the 32-inch video screen – the biggest in the airline industry – makes SWISS’s inflight entertainment a pure and total delight.

All nine of the new SWISS Boeing 777-300ERs will further offer wireless internet connectivity, provided via a broadband connection. The new internet access will enable guests to surf and send emails on their laptop, tablet or smartphone device.Not on the JNB route as yet, but from the Northern Hemisphere 2016 summer schedules onwards the new SWISS Boeing 777-300ERs will be deployed primarily on services to Hong Kong, Bangkok and Los Angeles. San Francisco, São Paulo and Tel Aviv will also receive SWISS Boeing 777 service several times a week. For operational reasons, the new twinjets will further be operated to New York JFK and Montreal until September 2016.

Four bidders eye IndabaTessa Reed

FOUR companies have expressed an interest in becoming a strategic

partner for one or more of the trade shows SA Tourism owns and manages – namely, Indaba and Meetings Africa – as well as a third show that SA Tourism believes is needed for the luxury segment. They are Thebe Reed Exhibitions, Pure Grit Project and Exhibitions Management, Outlaw Events Management and Synergy Business Events.

Thebe Reed Exhibitions is the organiser behind Africa

Travel Week, consisting of World Travel Market Africa, International Luxury Travel Market Africa and Incentives, Business Travel & Meetings Africa.

Pure Grit is the current organiser of Indaba and is also the organiser behind SA Tourism’s presence in international trade shows such as WTM London and ITB in Berlin.

Outlaw Marketing and Events’ past projects include Ironman South Africa and the Proudly South Africa – Expo and Conference. Synergy Business Events describes itself as an experienced

exhibition organiser. Its past clients include SAA and Rovos Rail, while it lists Meetings Africa (2010-2015) on its website under ‘projects’.

SA Tourism published a call for expressions of interest in September last year, with a closing date of October 9, 2015. In the call for expressions of interest, SA Tourism said it was looking for a strategic partner for each or both of the two events as well as a third show. The strategic partner would jointly execute the shows. More than one partner could be chosen if a partner was not

suitable for all three shows.“In addition, SAT has

concluded that a third show, a luxury market show is essential for South Africa. Therefore to maintain its profile, be more impactful and to realise the potential to provide a business operational platform for the industry, the strategy is a triangle of exhibitions encompassing all three areas of leisure, business and luxury,” the call states.

The successful partner would need “extensive tourism trade exhibition experience” and would “provide equity investment

as well as share risk and profits”.

Minister of Tourism, Derek Hanekom, told TNW at the recent Meetings Africa show that the tender process to select a strategic partner had not yet been concluded. “We were hoping that the strategic partner would be found last year already,” he said, adding that the process was under way.

According to the Minister, the aim is for the partner to come on board for the 2017 edition of Indaba. This year’s show will be organised by Pure Grit and again hosted in Durban. n

Air Seychelles launches fifth JNB serviceFOLLOWING its recent announcement of the addition of a fourth weekly service from Johannesburg to Seychelles, Air Seychelles will launch a

fifth service on Thursdays, effective March 17.

The service will now operate on Wednesdays, Thursdays, Fridays, Saturdays and Sundays,

with flight HM 060 departing Johannesburg at 14h00 to arrive in Seychelles at 20h55. The return flight HM 061 will depart Seychelles

at 09h25 to arrive in Johannesburg at 12h35.

The Wednesday, Thursday and Saturday flights will be operated using an Airbus A320 aircraft, whereas the

Friday and Sunday flights will be operated using an Airbus A330. The addition of the Thursday flight will boost capacity on the route to 868 seats a week. n

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8 n Wednesday March 9 2016 QUICK READ FOR DECISION-MAKERS

REPORT AMADEUS AWARDS

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Shaping the future of travelNatasha schmidt

AMADEUS recognised its top-performing industry partners at

the recent Shape Awards, partners that have helped ‘shape’ the future of travel in Southern Africa. The glitzy event was held at the Inanda Club in Johannesburg on February 25.

“Customers are evolving – it’s about experience,

the ‘what and how’,” said Amadeus vp for Africa, Paul de Villiers. “The future traveller is born for the Internet, they want to be connected all the time, they want personalised service and to feel special, and they want convenience. They are happy to take risks, such as using Airbnb, because technology has negated the risk of booking via sharing economy start-ups.”

It was therefore becoming more important to understand the needs and behavioural trends of customers, Paul said, “and this is where partnering with the right technology solutions provider can make the biggest difference in terms of segmenting the market, improving efficiencies and cutting costs, and driving additional revenue streams”.

The winners…Partnership Award Valued Alliance – Archie

Modiba of Atlantis Corporate Travel

Performance Awards Large Travel Management

– American Express Marine & Offshore

SMMEs – Sirius Travel ITC – Arthur Zia-Fei of

Sino-Nam Travel

Tour Operator – Thompsons Holidays

Online – TravelstartInnovation Awards Travel Management –

Tourvest Travel Services Tour Operator –

Beachcomber Tours SAShape the Future of Travel Mary Shilleto, Thompsons

Travel n

Thompsons Travel awarded Mary Shilleto the ‘Shape the Future of Travel’ award, acknowledging her contribution to studying the Amadeus environment and its solutions and “being a change agent within her organisation”. Pictured here, with Mary, is new Amadeus Southern Africa gm, Andy Hedley. Photos: Natasha Schmidt

From left: eTravel’s Garth Wolff (ceo) and Avril Leigh Shackleton (travel manager, Inland) with Amadeus vp for Africa, Paul de Villiers.

QUICK READ FOR BUSIEST PEOPLE Wednesday March 9 2016 n 9

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New airline entrants struggle to combat market distrust

Avis Budget Rent a Car has been named the exclusive car-rental partner for the 46th annual Old Mutual Two Oceans Marathon taking place in Cape Town over the Easter weekend. Agents can find athletes good deals on car rentals by visiting Budget’s website and searching for Two Oceans Marathon promotions. Pictured here (from left) are Avis Budget Rent a Car key account managers for travel sales, Cynthia Dicks, Bonolo Pitsoe and Camille Nel. Photo: Megan Fischer

On your marks, get set, go!

sue VaN WiNseN

THE high rate of failure for new airlines entering the SA aviation space has made it difficult for

emerging entrants to gain credibility and the trust of local consumers.

Speaking at the recent GBTA workshop in Pretoria, Fly Blue Crane cco, Theunis Potgieter, said despite their ambition, many failed new entrants made the mistake of underestimating just how difficult it is to enter the market and this has tainted people’s perceptions. “The barriers to entry are high as you have to pay upfront for fuel, Acsa fees and aircraft.” He added that airlines should factor in an investment period of about three years before they should expect to start to turn a profit.

Theunis added that many new airlines made the mistake of trying to compete on the 10th busiest route in the world, Johannesburg-Cape Town. He said that, instead, Fly Blue Crane had opted to focus on routes with higher margins, while dealing with the right distribution partners, proving their proposition would be a key part of their future strategy. “People are starting to ask questions about who is behind new brands in the aviation sector – and in our case we have a lot of people who have been in the

industry for a long time.” Richard Bodin, cco of fastjet, agreed

and said that while SA was one of the most attractive destinations in Africa, its aviation sector “has a catalogue of spectacular failures”. He said the country’s limit of no more than 25% foreign ownership of airlines was also a barrier to entry.

“As a relatively new airline and a low-cost carrier, fastjet is very focused on stimulating demand. While we are growing, we are keeping fares low at this point to generate interest in demand in recognition of the fact that there have been some market failures,” said Richard.

He added that revenue management principles were constantly evolving and that price elasticity was essential. “Certain African countries rely on cash in hand at the moment, which makes yield management a real challenge. For example, easyJet would expect 40% to 50% of seats to be sold 11 months ahead of travel, while fastjet’s average is just nine days.

“Reputation is key, and our hope is that, as we grow our routes, frequencies and footprint, so we will get more and more converts. If people fly with us and feel they got value, then hopefully word of mouth will spread,” added Richard. n

Barsa updates website THE Board of Airline Representatives of South Africa (Barsa) has updated its website and included a CV portal, updated industry news and events calendar.

The CV facility allows travel agents to upload their CVs to let them be viewed by Barsa members who have job vacancies. Prospective employers can also browse through uploaded CVs in the members-only section of the website.

The website now also includes up-to-date member and industry news, useful links, as well as press releases and resources that are only accessible to logged-in members.

“We have put a lot of effort into ensuring that this updated website meets the online needs of interest to consumers, our members in the international airline arena, industry stakeholders and strategic partners,” says Barsa ceo, June Crawford. n

10 n Wednesday March 9 2016 QUICK READ FOR DECISION-MAKERS

REPORT THE BUSINESS OF AVIATION

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How do airlines survive when operating costs compound drastically but fares need to stay low? Comair ceo, Erik Venter, discussed the business of aviation at a recent forum at the Gordon Institute of Business Science. Darise Foster reports.

Remaining relevant in a tough market

THE aviation industry has probably burned more equity and

capital than any other industry and yet people are still desperate to get into it, says Comair ceo, Erik Venter. Speaking at the Gordon Institute of Business Science on February 24, Erik said the trend continued to amaze him, especially given South Africa’s track record when it came to the launch, and then failure, of new airlines.

The cost of flying has dropped by 70% over the last 60 years, he said. “Meanwhile, the total cost of running our Comair operations has increased by about 230% since kulula was introduced in 2001 and the average airfare has only gone up by 35% over the same period.”

The challenge for

airlines was to manage this discrepancy – not letting the gap widen – by leveraging institutional memory and expertise to remain innovative and come up with new ways of keeping costs down while driving growth, Erik said.

“Comair starts every year by figuring out how we are going to cut costs to keep the business going. Planning for every year is critical. You can’t plan five years in advance because things will have changed far too much by then – and then it’s too late to recover.”

This was the reason SAA continued to see major losses each year, Erik said.

“Nothing has really changed at SAA since it received its Boeing 737 fleet in 1999/2000. So trying to implement changes now after 15

years of not doing much to improve efficiencies is a big ask.” The aviation industry is very susceptible to the influence of external factors – such as the rise and fall of oil prices and competition – and therefore airlines often have to deal with unpredictable crises.

“Never waste a good crisis,” said Erik.

Dealing with crisis“You have to get staff

to realise that things will not always go smoothly and this industry is not a safe haven. A crisis should be used to tighten up operations and prepare for future difficulties.” Staff would also be more receptive to change, he said.

For example, Comair experienced a serious crisis in 2011 when the

oil price rose rapidly. “At the rate it was increasing, it took us almost a year to get the airfares up high enough to compensate for that. But it was a great opportunity to do a massive IT infrastructure re-work within the company.”

Erik said if Comair had attempted to re-work its IT infrastructure two or three years prior to the crisis – when operations were still running according to plan – there would’ve been resistance from the staff.

“I’m sure people would have said we don’t need new systems but when faced with the choice of having bonuses cut or their salaries frozen for a year, people were happy to say, ‘yes, let’s do this because we need to get back to where we used to be’.”

Comair to ‘play it safe’ in 2016Dorine reinstein

FACED with challenging market conditions in the first half of the 2016 financial year, Comair has said it will be playing it safe for the remainder of the year, focusing on retaining its market share.

The airline published its results for the interim period leading up to December 2015, reporting that revenue decreased by 5% due to a 10% decline in average

yield. On the upside, the airline reported strong cash earnings of R382m and a cash balance of R972m at the end of the year. Passengers carried increased by 4%.

Comair suffered losses from its fuel hedges, which matured at the end of last year. Another major stumbling block for the airline was that it had to revalue a dollar-denominated loan of US$27m (R429m) on one of its aircraft. The

kulula brand has suffered from pressure as a result of increased competition and “excess capacity” in the market. “Our average ticket prices have declined 10% compared with last year, whereas the average industry yield has declined by 25%. At some point there will need to be a correction,” says finance director, Kirsten King. “Airlines will be very cautious of increasing prices suddenly for fear of losing market

share,” she says, adding that the public should rather expect a slow and gradual increase in fares.

For the upcoming year, Kirsten says Comair will not be making any bold moves. “What we’re doing now is maintaining market share in a difficult climate.” The airline has no immediate plans to extend its route network. The only new route on the cards is a service to St Helena Island, which is expected to commence in

May. However, Kirsten says the St Helena government has subsidised the route.

The airline’s strategy is to focus on big data. It will continue to grow its loyalty scheme with Avios in order to gather as much customer data as possible to improve the customer experience through increased personalisation, Kirsten says. “We’ll make the flying experience more personal by targeting what people really want.” n

“Never waste a good crisis. You have to get staff to realise that things will not always go smoothly and this industry is not a safe haven.”

Erik Venter

NEWS

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QUICK READ FOR BUSIEST PEOPLE Wednesday March 9 2016 n 11

At the Johannesburg leg of its annual roadshow, held at 54 on Bath on February 16, World Leisure Holidays showcased its latest product range. This year’s roadshow stood out as it was the first time the tour operator presented all its product partners in a roadshow format to the South African market. They include Veranda Resorts, Kerzner International Resorts and Shangri-La’s Le Touessrok Resort and Spa. Pictured here (from left) are: Sayeed Eyasim (sales manager Sun Resorts); Cathie Bester (national sales manager WLH); Ramesh Jeenarain, (financial controller WLH) and Ingrid Zahavi (travel consultant Fairmount World Travel). Photo Taryn Nightingale

SAA’s online bidding system – how does it work?

ACTING as the client, TNW bid for a business-class upgrade on flights between Johannesburg and Cape

Town, departing on December 26, 2015 and returning on January 3, 2016.

Tasneem began the bidding process on November 20. At this point, the bid for the Johannesburg-Cape Town leg started at US$60pp (R963) and the return bid at US$40pp (R642). Tasneem points out that the timing and popularity of the December 26 flight is a likely reason for the hefty starting bid.

The client elected to go with the starting bid and Tasneem says, when she placed this bid, the system immediately alerted her to the fact that it was a weak bid. However, the client chose to stick to this bid.

After placing the bid, Tasneem says the process was simple. “I completed the required details, filled in the reference number, called up the booking and provided the client’s credit card details. Thereafter I received an email notifying me that I would be alerted 24 hours before the flight whether or not

the bid had been successful and, if it was successful, the amount the client would be charged. The client was sent the same email,” she explains.

It is important to note that the client is not charged for placing the bid, only if the bid is actually successful.

Unfortunately, the bid was unsuccessful, as they were ultimately informed by email the day before departure. Though, Tasneem points out, the system did classify the bid as weak.

Spokesperson for SAA, Tlali Tlali, says the success rate of Step-Up is very dependent on the quality of the bids, the time of year and the actual route. “All these factors influence how many upgrades we are able to accept.” He notes that in the first eight months of the programme SAA has had over 7 000 bids and the success rate of customers getting the upgrade they bid for was over 60%.

Aside from the success of the system, ultimately Tasneem says the process of using Step-Up is streamlined and simple for agents to use. n

WLH hits the road!

TNW asked senior customer service agent for Webjet SA, Tasneem Suliman, to conduct a ‘road-test’ of SAA’s online bidding system, Step-Up. Debbie Badham asked Tasneem for her professional opinion on the process.

12 n Wednesday March 9 2016 QUICK READ FOR DECISION-MAKERS

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Travel to Austria and Germany is not as expensive as South Africans may perceive it to be. Taryn Nightingale investigates how agents can take advantage of this.

How to sell budget-friendly packages

ALTHOUGH the perception exists that travel to destinations such as

Austria and Germany is pricey, industry experts say the reality of the situation is different.

“Austria is far less expensive than is generally expected,” says Inge Dobihal, owner of Austria Connection. She says there are alternatives for the more cost-conscious and that there is a misperception that higher rated hotels offer big differences in service.

Sean Hough, ceo of Pentravel, agrees, saying that although there has been a shift away from family skiing in Austria, cost-effective alternatives are readily available. “Contiki Hopfgarten is experiencing huge demand from us. It is a ski resort

for under-35s and it is the cheapest and most fun option for young people available.”

“It is not necessary at all to stay at four-star hotels and one can stay with confidence at any three-star hotel,” adds Inge. “It is also not necessary to travel first class in trains. The difference between first and second class is minimal and second class is much cheaper. The first-class service offers slightly softer upholstery, computer connections and a free Austrian newspaper, which is of value to business travellers but not necessary for tourists.”

With the right research, agents can put together great packages to Austria and Germany for travellers who are on a budget. Travel agents need to find a creative travel

solution for their clients when they pose them with a budget and destination problem, says Stuart Goodall owner and manager of ITC, Travel 15. “With a little research you can still have a great experience but at much lower rates,” he adds.

Anthea Hay, owner of ITC Peak, agrees that part of this research involves travel agents keeping up to date with the latest product knowledge. She says there are many ways of cutting costs, including exploring alternative ways of getting clients to their destination.

In light of this, developing good relationships with suppliers is important for an agent’s ability to sell these destinations.

Travel agents must focus on cultivating strong

relationships with tour operators that give them an advantage when selling to the South African market, says Anthea. She encourages agents to deal with a reputable operator who has had the experience to negotiate great deals and discounts on their behalf.

“Business cards are gold and if you know the right people you can negotiate the best service for your clients,” Stuart adds.

Trafalgar, for example, has kept its pricing at the same levels it had set in August 2015. Because of the operator’s Rand Price Guarantee, travel agents can book packages to Austria and Germany for their clients without being concerned about the rand’s fluctuations.

“Austria is far less expensive than is

generally expected.” Inge Dobihal To page 14

Dresden, Germany.

TNW7483SD

14 n Wednesday March 9 2016 QUICK READ FOR DECISION-MAKERS

For a FREE subscription to TNW contact Gladys on

gladysn@nowmedia.co.za

TNW7421SD

GERMANY AND AUSTRIA

It’s not all about priceWHILE affordability is important, ITC Peak’s Anthea Hay also stresses that agents need to consider whether they are offering their clients value for money. “It may be one thing to save R1 000 on an airfare via Timbuktu, but when you are sitting in an airport late at night for hours, with perhaps small children, wondering if your luggage has also made the connection, is there true holiday value in this?” she says.

Theresa Szejwallo, md of The Travel Corporation and Trafalgar, emphasises that it is important to sell destinations in a way that showcases how and what make these destinations special. In Trafalgar’s case, the value of Austria is expressed in trips that reflect the

authentic cultural experience of the Austrian countryside. “[Trafalgar] uses our Insider Experiences to really give our guests an authentic experience of the cities and countries they’re travelling through.” The tour operator offers a Sound of Music trip where travellers are offered an Insider Experience at its Be My Guest dinner with a local family on their farm near Salzburg. “The Klaushofer family host our guests on a farm that has been passed down from generation to generation. The Faisternauer Farm is organic and produces cheese and butter, honey from their bees and elderflower products,” says Theresa.

She says a destination can be showcased even in the accommodation that it offers,

adding that Trafalgar offers “authentic accommodation” as another Insider Experience designed to “lift travel to another level”. On the Sound of Music trip, travellers will stay in the Meierhof, Schloss

Leopoldskron in Salzburg, a hotel that was commissioned by the Prince Archbishop of Salzburg in 1736 and was also used as the setting for many of the scenes that were filmed for the movie.

Air travel is still affordableWHEN selling Austria and Germany, agents should also point out to their clients that the airfares to these destinations are still affordable.

Danica Helfrich head of SWISS Southern Africa, says

despite the fluctuations in the rand’s exchange rate, the airline’s fares have remained stable and competitive.

Spokesperson for SAA, Tlali Tlali, says the depreciation of the rand has not had a major impact

on SAA’s fares. He explains that SAA’s airfares in South Africa are predominantly priced in rands with only a portion of the taxes in foreign

currency. In fact, Tlali says SAA has actually noticed an increase in the number of South Africans travelling to Europe with the airline.

Advise your clients…FOLLOWING Germany’s introduction of border checks in September and Austria’s decision to follow in November, travellers need to note that, due to the influx of asylum seekers there

will be passport checks at the borders to control illegal immigrants, says Inge Dobihal from Austria Connection. There are no restrictions, however, for travellers

holding a Schengen visa. Pentravel’s Sean Hough says travellers should be aware of random checks in these destinations and ITC Peak’s Anthea Hay advises that travellers should be

prepared for minor delays at airports due to the increased security checks. However, there are not any delays or security checks that would drastically inconvenience travellers. n

How to sell budget-friendly packages

Trafalgar’s value product, CostSaver, is designed specifically for travellers who are budget conscious. An example is Highlights of Germany, which is priced from R18 850 for 12 days per person sharing (R1 571 a day). The package explores a large part of Germany, including Frankfurt, Wuppertal, Hamburg, Berlin, Dresden, Nuremberg, Munich and the Black Forest. It includes three- and four-star accommodation with breakfast daily, five three-course dinners, applicable airport transfers, a travel director who is an expert in the locations explored

and a separate driver.Inge says Austria

Connection offers travellers reasonable prices for family holidays and that it has one such product designed for families travelling this Easter. Vienna for Families is designed for cost-conscious families who want to ensure that their children have plenty to do while on holiday. The package centres on a visit to Schönnbrunn, the former summer residence of the Hapsburg family. There, families can visit the House of Music – where they can learn about music and sound and also have the opportunity to conduct the Vienna Philharmonic Orchestra –

and the Butterfly House. The ZOOM Children’s Museum offers special exhibitions and workshops and The Prater, Vienna’s amusement park, with its giant Ferris wheel, are also included as part of the activities offered.

The package price includes three nights in a family room in a three-star hotel with breakfast as well as a 72-hour Vienna

Card. The card offers free public transport and discounts on entrance fees and sightseeing tours. Entrance to the Vienna Zoo at Schönnbrunn Palace, including a ride through the zoo on the ‘train on wheels’ as well as a three-course lunch at a restaurant in the zoo are also included in the package. A ride on the giant Ferris wheel

in the amusement park and entrance to Madame Tussaud’s Wax Museum are also included in the offer. The package prices depend on the exact dates, number and age of children but is available from €625 (R11 000) for the whole family (two adults and two children) for three nights and includes the aforementioned activities.

From page 1

A visit to Schönbrunn Palace is included in the Vienna for Families package.

Danica Helfrich

On the Sound of Music trip, travellers will stay in the Meierhof, Schloss Leopoldskron in Salzburg. Photo: Wikimedia Commons

JOBSCOMMUNITYNEWSBirths, deaths, marriages, promotions – we want to know! Please fax or e-mail TNW’s Debbie Badham, at debbieb@nowmedia.co.za or (011) 327 4094.

QUICK READ FOR BUSIEST PEOPLE Wednesday March 9 2016 n 15

The City Lodge Hotel Group’s first employee, Lynda Schroeder, picked exactly the right day to leap into retirement – February 29, ‘leap year day’.

She was Hans Enderle’s secretary when the City Lodge Hotel Group opened its first hotel, City Lodge

Hotel Bryanston, on August 1, 1985. As the group grew, she moved into the buying side and became the group’s purchasing manager, a position she held until her retirement.

Seen here celebrating with Lynda at a retirement party held at the group’s Bryanston head office are (left) the group’s former chairman and founder, Hans Enderle, and Bill

Dickson, a co-founder and the group’s first financial director.

Appointments

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ObituaryTHE travel industry is mourning the loss of Catherine Elizabeth (Zena) Lethbridge who passed away on February 18.

Well known and loved within the industry, Catherine began her career in the 1970s at Columbia Travel which was owned by Lou Etkin at the time. She then started her own business – Hotel and Conference Bookings – where she managed hotel reservations, conferencing and incentive travel, a novel idea at the time. From this evolved Milpark Travel and then Sure Travel Management. She was joined in 1985 by her partner, Roger Mackie (former Asata president and Uftaa main board member).

She retired in 2004 after her business was purchased by Grindrod Jet International Travel.

Catherine is described by fellow colleagues within the industry as a private, dignified and beautiful person, who loved the bush and, in particular, her cottage on Ingwelala on the Kruger Park border. She travelled extensively and always enjoyed attending tennis at Wimbledon.

A memorial service was held for Catherine on February 24, attended by well-known members of the industry such as Vanya Lessing, Ivan Visee, Des O’Loghlen, Dave Bradshaw, Alan Wolman and Laurie Wilkinson.

n Skål Johannesburg Club’s annual general meeting was held on February 26 at the DaVinci Hotel, Sandton, where the new board was announced. The newly elected president is Brenda Dooge (pictured) group client, media & public relations manager from Guvon Hotels & Spas. Brenda said: “I see it as my duty to respect the history and traditions of this great organisation whilst ensuring that it meets the requirements of its membership and today’s tourism industry.”

Skål Johannesburg Club will be focusing on increasing membership in 2016, by creating value for members and planning effective, fun networking events.

n Natasha Freeman has joined Sabre as its new senior sales representative. With more than 20 years’ experience in the travel industry, Natasha spent the last 14 years representing AirPlus International, marketing and selling its payment and analysis products for business travel.

The steering committee for the new KZN Travel Industry Golf Club was elected at its inaugural game. (From left) Marvin Gabriel (Overseas Visitors Club); Jose da Silva (Jomar Services and Travel); Pippa Coote (Sprout Consulting); Donovan Muirhead (National Accommodation Assoc. of SA) and Donovan Moodley (Serendipity Tours). Photo: Dave Marsh

Beachcomber Tours recently hosted an educational in Mauritius. Pictured here (back from left) at Le Mauricia enjoying tropical cocktails are Cerone Strydom (Flight Centre George); and Shelley Daniels (Beachcomber); (front from left): Zelda Folkus (Flight Centre Blue Route); Janine Fouten (Flight Centre West Coast); and Patricia Szasz (Flight Centre Plattekloof).

A new committee

Cheers!

16 n Wednesday March 9 2016 QUICK READ FOR DECISION-MAKERS

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Ethiopian Airlines is offering travellers the chance to pay full price for one ticket and get 50% off the second. The offer, which is valid for departures from Durban to all Ethiopian’s destinations featured online, will see the first passenger pay the full adult fare and the second pay half the fare plus all taxes. The second passenger can be an adult or a child. The promotion is valid for travel and sales on/before March 31 using the DUR-32-A ticketing code. Pictured here (from left) preparing for take-off are Ethiopian Airlines’ senior sales representative, Bathi Pendu; and senior customer service agent, Naomi Chiyinge. Photo: Megan Fischer

Buy one, pay 50% for the second!

Agents summoned“The Commissioner alleges that this conduct could amount to inducing travel agents not to deal with Emirates’ competitors, thereby hindering competition in the market.”

One agent who preferred to remain anonymous, said they had been called to Pretoria for an interview with the Competition Commission. “We had to provide quite a comprehensive set of documentation relating to our dealings with international airlines, and one international airline in particular.”

The agent says that during the interview a lot of questions were asked relating to the supplied documentation, adding that questions asked about information supplied dated as far back as a couple of years ago.

“It was not obvious by the type of questions they were asking what they were trying to establish

and at no point during the interview did they disclose what they were looking for.”

“There is nothing untoward in our dealings with Emirates,” says Allan Lunz, md of BidTravel. He does point out, however, that the Middle Eastern airlines are a threat to traditional European carriers. “Emirates flies here four times a day so I wouldn’t be surprised if the other airlines feel Emirates is taking passengers away from them. Although it’s interesting to note that Emirates is not always the cheapest. Sometimes Etihad and Qatar are cheaper.”

When asked for comment regarding the Commission’s investigations, Emirates told TNW it took compliance with competition law very seriously, and that the airline was co-operating fully with the Commission’s enquiry. n

From page 1

Axe to fall on Flyafrica SA Debbie baDham

FLYAFRICA’S operations in South Africa will be liquidated, while

employees are left without pay and still in the dark about what’s going on at the airline.

Fly Africa Aviation Services (FAAS), Flyafrica SA Ltd, and Africa Aircraft Maintenance – subsidiaries of the holding company based in Mauritius – will be placed into liquidation, says Daniel Terblanche, an associate director in the Corporate Finance department at Deloitte & Touche, who was appointed as the business rescue practitioner for the South African companies.

When the Flyafrica group was established, a different company was set up in each country from which it would operate. The companies were then run from SA by FAAS, which acted as a virtual office for the airlines.

Daniel told TNW, based on the limited information supplied to him, there was no reasonable prospect of the SA companies being rescued. He is therefore obliged to discontinue the business rescue proceedings and to request the High Court to place the companies in liquidation.

“Due to a fall-out between the investor and top management, a decision was made by the investor not to fund the airline with another cent and this is to the detriment of the company’s biggest assets, the people, who haven’t been paid for as long as three months,” employees of FAAS said in a statement.

The employees of FAAS, who were responsible for

running Flyafrica’s airlines, have been left in the dark, without communication from management, including new ceo, Michael Duncan, who could not be reached for comment. “Not a single staff member has received any form of documentation that will assist them with their current financial dilemma (due to no pay or notice of termination),” the statement said.

FAAS’s executive management team was suspended in January, at which point staff members were told Michael would take over as acting ceo. On February 5,staff were promised the restructure of operations. However, it was not long after this that Michael “disappeared without communication”, a staff member told TNW.

Flyafrica Ltd could not be reached for comment on what this meant for the group’s operations as a whole.

Flyafrica Zim refinanced Meanwhile, Flyafrica Zimbabwe will continue to operate as a separate entity, having acquired a new investor. The airline plans to relaunch flights within the next two weeks.

Flyafrica Zimbabwe operates separately under an AOC owned by Nu-Aero private Ltd, which has recently received a financial injection of US$6,6m (R103m) to refinance and rejuvenate operations on its existing routes, chairman Cassidy Mugwagwa, told TNW.

The airline currently operates under a franchise agreement with the holding company, Flyafrica Ltd, through which it pays 3% for use of the brand.

Now operating as a separate entity, Flyafrica Zimbabwe has recruited airline

operational staff who will be based in Harare. In terms of supplementary functions such as marketing and sales, Cassidy says the airline will follow its franchise agreement with the holding company. “However, should Flyafrica Ltd prove unable to provide these services as per the agreement, we have made provision to operate on our own and will offer jobs to existing staff members before looking elsewhere.”

Flyafrica Zimbabwe will also renew its relationship with Hahn Air and will outsource ticketing in the SA market to Holiday Aviation. “Flyafrica Zimbabwe has informed us that it will retain our ongoing services as a ticketing agent for the airline as well as excess baggage fee collections from our offices in Randburg and ORTIA once the airline resumes flights,” says sales and marketing director of Holiday Aviation, Matthew Simpson.

Meanwhile, it seems unlikely that Flyafrica Namibia will resume operations in its original form. Frank Stein, director and shareholder for Nomad Aviation, which provided the licensing and ground operations for Flyafrica Namibia, says there are no plans from Nomad Aviation’s side to resuscitate Flyafrica Namibia’s operations. He says Nomad Aviation had a franchise agreement with Flyafrica Ltd through which the Mauritius-based company provided the Flyafrica brand name and expertise. However, Frank explains that Flyafrica Ltd never honoured its side of the agreement and Nomad Aviation has been left with the resulting costs. n