Fast-growing feeder

SA Express is one of two airlines providing feeder services for South African Airways (SAA). The airline started flying in spring 1994 as South African Express. Today, known simply as SA Express, it operates a fleet of 22 aircraft and is one of Africa’s fastest-growing regional carriers. Exciting times are ahead as the airline plans to add Embraer regional jets to its fleet as well as a number of new international destinations to its network.

Early Days

SA Express can trace its history back to the early 1990s when the Canadian De Luce family, which had decades of experience in aviation, saw potential for a regional airline in South Africa. At the time, SAA was the dominant airline in the domestic market. However a number of routes were unserved, or underserved, as the Boeing 737s SAA used for domestic operations were simply too big for some airports.

From the beginning, South African Express was meant to be primarily a feeder carrier for SAA, offering services to the airline’s main hubs from smaller markets or additional frequencies on busy routes. When South African Express started operations the De Luce family became one of the major shareholders, with SAA also holding a 20% interest. A fleet of 12 factory-new DHC8-300 turboprops were delivered to the airline within just six months in what was a very important order for the Canadian manufacturer at the time.

Bloemfontein was one of the first airports served by SA Express. Providing services to the city, South Africa’s tenth biggest, seat of the country’s supreme court and an important business destination, is a good example of how the airline improved access to smaller markets. Before it started operations, Bloemfontain had a daily SAA Boeing 737 flight from Johannesburg in the morning that would continue to Cape Town and return to Bloemfontein in the evening on its way back to Johannesburg — not very convenient for business travellers. SA Express added more frequencies at Bloemfontein and there are currently eight daily flights from the city to Johannesburg on a work day and four to Cape Town. Similarly, SA Express began providing more frequencies to other regional cities as well as taking over some thinner routes from SAA.

SA Express flights operated from the start using the SA code of South African Airways, although the airline holds its own XZ code. Half of the 12 DHC8-300s were traded in later for the same number of Bombardier CRJ200 regional jets, allowing the airline to operate longer sectors such as international flights to Namibia, where flight times on a turboprop would have been excessive. SA Express continued operating the mixed fleet for some years, with only a single DHC8-300 being added in 2001. It was not until 2006 and 2007 that a major fleet change took place when new, larger, Dash 8 Q400 turboprops and CRJ700s arrived. During the 2010 World Cup in South Africa, SA Express’ profile was raised when it was appointed the official domestic airline for the event and flew all teams to and from their matches.

Congo Express

An interesting episode in the history of SA Express, although one that did not last very long, was a service to Lubumbashi in the Democratic Republic of the (DR) Congo as part of a joint venture called Congo Express. Lubumbashi is a mining centre and the country’s economic centre. As the vast DR Congo lacks a reliable road network between major cities and distances are long, flying is often the only option. However, because airlines have come and gone, and a number of accidents have taken place, foreign companies often ban employees from using domestic airlines and insist they fly via Johannesburg or elsewhere instead.

SA Express tried to tap into this market by offering a reliable and safe domestic service to Lubumbashi, with flights beginning in 2004. A local partner (BizAfrika Congo) was found and a joint venture set up in which SA Express held a 49% stake. “The knowledge of a local partner seemed indispensable,» explained Dave Allanby, SA Express’ General Manager Flight Operations. “The way things work here are quite different from South Africa. When it comes to ticket purchasing, people would often show up at the airport and only buy their ticket once the inbound flight had landed as flights, in their experience, had a habit of being delayed for hours or even days. Also cash is king here, which makes the handling often more difficult for an airline as well.»

SA Express eventually received permission from the Congolese Government to add flights to the capital Kinshasa and Mbuji-Mayi as an addition to the Johannesburg-Lubumbashi service. A single CRJ200 was based in Kinshasa and operated daily flights. Loads were good initially, but then other airlines started to fly the same routes. These operators’ fares undercut those of Congo Express, which were higher because of its greater operating costs. Additionally, Congo can be a challenging country for any company with its often basic infrastructure and a complex and unpredictable legal and regulatory framework. With these conditions, and only one aircraft in operation, the venture was deemed to be unsustainable and SA Express pulled the plug just a few months after the services started. Despite the failure, flights from Johannesburg to Lubumbashi are still part of the SA Express network and operate five times a week, using a CRJ700.

Today SA Express’ network today covers 10 destinations in South Africa. The airline’s main hub is the country’s busiest airport, Johannesburg’s O.R. Tambo International, where it operates 236 departures each week. Its two smaller hubs are in Cape Town and Durban. Destinations include the bigger cities along South Africa’s coastline such as George, Port Elizabeth, East London and Richards Bay as well as Bloemfontein, the ‘Diamond City’ of Kimberley and Hoedspruit, the gateway airport for the Kruger National Park.

Internationally, SA Express serves Botswana’s capital Gaborone, with up to eight Q400 flights from Johannesburg daily, Windhoek and Walvis Bay in Namibia, from both Johannesburg and Cape Town, Lubumbashi in DR Congo, from Johannesburg, and Maputo in Mozambique, from Cape Town. International flights launched recently from Cape Town have been well-received by passengers. All SA Express flights, domestic and international, offer a single-class cabin and the in-flight service consists of sandwiches, sweet snacks and a selection of hot and cold beverages, including local wines.

Flights to neighbouring countries are either non-existent or infrequent from airports other than Johannesburg and, while demand remains insufficient for aircraft as big as a Boeing 737 or Airbus A320, smaller aircraft like SA Express’s Q400s and CRJs are the perfect size for profitable and therefore sustainable services.

Business Model

SA Express’ business model is based on opening up a new market with limited, but business-friendly, frequencies (around three-quarters of the airline’s passengers travel for business) with two flights on weekdays being the norm. If passenger demand grows, frequencies are often increased. However, as most of the markets in which SA Express operates are fairly saturated, the airline has decided to add aircraft with more capacity to generate further growth.

This is being made possible by replacing the remaining 50-seat DHC8-300s with the bigger 74-seat Q400s. The last DHC8-300 route is from Johannesburg to the small airport of Richards Bay. Due to operating restrictions, the Q400 is currently unable to land at the airport. However apron adjustments planned for the near future will mean it is able to receive the type, enabling the last two DH8-300s to be retired. The SA Express fleet will then consist of nine Q400s, nine CRJ200s and five CRJ700s.

Fleet maintenance is carried out by the airline’s engineering staff in two hangars at Johannesburg, with line maintenance checks also carried out at Cape Town and Durban.

E-Jets

As part of its plan to increase capacity SA Express, like many regional airlines, has decided to operate bigger aircraft in the future. Often only marginally more expensive to operate than small jets and turboprops, they also offer the added benefit of improved passenger comfort. SA Express has identified the Embraer E-Jet as its aircraft of choice, and the company plans to place an order soon for what is likely to be a mix of E-175s and E-190s. These will replace the CRJ200s and CRJ700s and operate alongside the Q400s, which will be kept for shorter or less busy routes. The E-Jets will enable SA Express to carry more passengers on the same number of flights thereby making better use of the increasingly precious slots at Johannesburg’s O.R. Tambo Airport.

SAA Ties

SA Express and the other regional feeder airline for the SAA network, Airlink, operate independently of SAA. However, they are wholly owned by the Department of Public Enterprise, the same government agency that owns SAA and the flag carrier’s low-cost offshoot Mango. There is close cooperation with SAA. The 2009 re-brand from South African Express to SA Express, and the adoption of its own distinct corporate identity, may seem like a move away from the flag carrier. However, SA Express retains its primary function of providing passenger feed into SAA’s hubs as well as adding frequencies and capacity on the SAA network. Passengers can buy through tickets from, for example, Bloemfontein to London with the first sector being operated by SA Express and the second by SAA, in the same way many regional airlines around the world operate for their bigger partners.

Network Plans

SA Express is, nevertheless, able to develop its own routes such as when it started daily flights between the newly-opened airports in Durban and Cape Town in 2010 and the 2011 service from Cape Town to Hoedspruit, mostly used by tourists combining a visit to the South African capital with the Kruger National Park.

The development of future routes is most likely to take place at smaller airports, such as Cape Town and Durban, which are less congested than Johannesburg and with connections to neighbouring countries.

While many southern Africa countries have experienced steady economic growth in recent years flight connections between these and South Africa, are often still limited to Johannesburg. For many provincial South African cities SA Express has improved accessibility significantly by adding new routes or more business-friendly frequencies. As mentioned previously, while demand may yet not be sufficient for aircraft as big as a Boeing 737 or Airbus A320, SA Express’ smaller aircraft offer a more suitable size. And the airline intends to continue pursuing this model by introducing a number of new international city pairs from Cape Town and Durban.

SA Express has evolved from a small feeder carrier to an important airline in South Africa’s domestic and regional arenas. Carrying more than 1.5 million passengers a year, it not only plays an important role for SAA but in the near future will open up a whole new range of international services that would not be economically worthwhile for South African Airways alone.

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