South African Airlines

Putting The Customer First

Nalini Gupta, regional head - India and SAARC, South African Airways believes that India has the growth potential and the recently launch IBSA triangle would work wonders for the airline and India

Nalini Gupta

The Company

The growth for South African Airways (SAA) in India has been consistent and considerable. In the last year, the airline has gradually increased its flight frequency into Mumbai from four to seven. And toward the end of the year - SAA re-enforced its commitment to the Indian market by introducing the latest A340 - 300 on the India route -, which also boasts of the award winning 'Lie Flat' business class seat. During the year, the Indian government has aggressively promoted trade between India and the Regional African countries. The introduction of addition flights into Mumbai meant better connectivity to these Regional African points and SAA was able to lay the foundation to become the preferred carrier to destinations.

Nalini Gupta say, "Buoyed with the launch of the IBSA (India - Brazil - South Africa) triangle between the three governments, over a 170 Indian companies initiated business interests in Brazil. On the passenger growth front, last year the airline carried about 40,000 passengers into South Africa."

Business Strategy

Airlines, the world over have to keep abreast with growing competition and in this regard, SAA's policies in the past years have been focused towards maintaining yields, given the fact that there was limited capacity to offer and that SAA was maintaining a healthy average load factor of 80 per cent.

However, SAA's key strategy is 'Putting the Customers first', thus making its customers feel important and comfortable. The airline currently operates seven flights a week using Airbus 340-300 E and 340-200 aircraft on the India route and has also placed an order for 41 Airbuses which would make it the youngest fleet in the world. As Gupta puts it, "We beat formidable competitors who offer similar products, including, British Airways and Virgin Atlantic. We are working closely with the South African Tourism Board to change South Africa's perception as an 'expensive' to an affordable destination.

In this regard, the airline - tourism nexus is particularly beneficial for airlines like ours, which serve a destination that is also an important tourist destination. In our case - we have seen considerable success with joint marketing initiatives together with the tourism board. Recent consumer-based promotions, like the ones with Shoppers Stop and MTV have not only introduced the 'amazing' South Africa to the masses, it has also resulted in a fair increase in the number of tourist traveling on us. Cost-effectiveness is the mantra for any airline now and SAA is no exceptions. Says Gupta, like most carriers, some of the primary areas that are being explored in this direction are agency commissions, meal and other operational costs, migrating to a more cost-effective and user-friendly CRS and finally, strategic alliances - like Star Alliance - to have wider reach while cross-utilizing networks and infrastructure of partner carriers.

SAA, in India, is known for its quality product offering and continues to maintain its niche in terms of its route spread and connectivity. We would continue to market our strengths like the 'state-of-the-art' equipment and network spread - both within Africa and South America to attract business/quality driven traffic.

The current boom is a boon and a great opportunity for the travel fraternity, but, the current infrastructure at the Indian airports certainly needs to gear up. Additional run ways, advanced ILS, seamless Immigration and baggage claim facilities are a few things which need immediate attention.

Future Plans

Going by the current trends, SAA is looking at attracting close to 60,000 visitors this year. The airline keen to introduce direct connections to South Africa from other 'Key' Indian cities like Delhi. With respect to the fleet enhancements, SAA has been in the news recently because of its purchase order to Airbus, which has had specialists in airline industry hailing this fleet upgrade as "the largest transaction in aviation history". By 2012 SAA will have taken delivery of nine A340-600, six A340-300E, eleven A319 and fifteen A320 aircraft - a total of 41 aircraft.

Going forward, since there is a considerable increase in the available capacity to sell over the last year (an almost 100 per cent increase over last year) - we intend to maintain a fine equilibrium between yields and loads, ensuring long term sustainability and profits.

In terms to yields, the focus is on 'long haul' and FIT traffic - capitalising on SAA's strengths and network. Besides, the front-end traffic (combination of government, YRT/JRT and business-oriented traffic) continues to boost and support yields. As for the loads, we will have concentrated efforts towards providing competitive group pricing to secure major corporate incentive and group movements.

Besides, being the only direct, non-stop service between India and South Africa, we would also like to promote our exhaustive network within Africa and South America. In fact, SAA today is the fastest way to get to Sao Paulo in South America from India.

Also, to become more effective from the regional growing markets with in India, SAA has secured SPAs with all major domestic carriers, thus providing competitive fares and connectivity options.

Moving ahead as Gupta puts it, the Star Alliance membership, slotted to come into effect early 2006, will also be a big plus and will further help SAA consolidate its position in the Indian market.

Vision

South African Airways has great expectations from the Indian market and recognizes India as a growing and promising market in terms of revenues and loads. The trade and economic relations between the two countries is becoming stronger and we are anticipating new tie-ups, collaborations between corporate segments of both nations.

India, as a country is looking at an exponential improvement in terms of both economic and social parameters. The Indian government is planning to double per capita income over this time frame. In the past, the GDP growth targets were fixed in such a way that the per capita income doubled in about 20 years. It is also interesting to note that as per World Bank GDP figures released on July 01, 2005 for 2004, India ranks 10th amongst the list of top 20 wealthiest counties in the World. This is a very healthy sign and puts India amongst the top ranking potential markets for all businesses - especially Travel - as it continues to be the back-bone of any growing economy.