Low-cost carrier 1time has been in the news quite a bit recently... but for all the wrong reasons.
It recently filed for ‘Business Rescue’, which essentially protects the airline from creditors from forcing it into liquidation while the new management team – led by CEO Blacky Komani – tries to turn the airline around and dig itself out of a R320-million hole of debt. It’s no easy task, and the airline’s shares have been in steady freefall for over two years, losing more than 90 percent of their value.
I’m more interested what this means for travellers, and the impact their – our – decisions will have on the fate of this privately owned airline. For now, the airline is sticking to its schedule and it’s business as usual. That’s good news.
But owning airlines (like yachting and many other pursuits) are often billed as a way to turn a large fortune into a small one, and with 1time’s aircraft looking rather long in the tooth – and that means thirsty for expensive kerosene – flying the airline back into profitability will be no mean feat.
The airline will obviously trim costs and maximise routes and be as lean as possible and those are smart moves to make, but largely the fate of the airline rests in the decisions made by us: the travellers flying from A to B, and deciding where to spend our rands.
Because perhaps more serious than big red mark on the 1time balance sheet is that us travellers are jittery types. At the first hint of trouble we abandon ship and head for calmer – more predictable – waters. Curse SAA and BA all you like, but I’m yet to find a traveller who doesn’t feel some measure of security in the arms of a nice big airline. Don’t believe me? Ask anyone stung by the failure of Nationwide whether they are still happy flying with private airlines.
And as soon as a critical mass of travellers decides to buy their air tickets elsewhere, an airline’s tailspin becomes unstoppable. Less income means less to spend on services and infrastructure, which cheapens the product, which means fewer customers, which means less income. It’s a cycle that rarely ends well.
So what will you do next time you need to fly from Joburg to Cape Town or Durban? Will you loyally support 1time to keep them flying, and keep much-needed competition in the market? Or will you spend a little more for the security of a state-owned or firmly profitable airline that is certain to be around in four, six or eight months time?
The oil price may rise or fall, and creditors may be kept at bay, but in a very real sense South African travellers hold the keys to whether 1time keeps flying... or hits the ground hard.