Reaching into Southern Africa: SAA's Growth Strategy

David Cogswell
by David Cogswell
Last updated: 2:19 PM ET, Wed June 4, 2014

The expansion of Skukuza Airport in Kruger National Park in South Africa, which makes it possible for South African Airways to fly larger capacity scheduled flights into the area through its partner AirLink is part of SAA's larger strategy of strengthening its intra-Africa network.

The expansion of Skukuza, completed on June 2, was managed by Airlink, an airline partner to South African Airways that provides vital links in SAA's network of connections within southern Africa. Airlink took over the construction in the expansion of Skukuza and also the management of the airport going forward. The expansion of Skukuza to open it to commercial aircraft was a project in the works for 10 years, driven primarily by Roger Foster, the founder and CEO of Airlink.

SAA's Dual Mission

As the national carrier of South Africa, owned by the government, South African Airways has a dual mission. Like other airlines it must strive for profitability. But SAA is also charged with the responsibility of providing transportation links to facilitate business and development for the greater good of the country.

Because of its responsibility to help boost commerce nationwide, SAA will sometimes take on routes that it may not have taken on from the standpoint of profitability alone.

With its hub in Johannesburg, South African Airways has a strong position in its bid to be the principle carrier of Southern Africa. Though there are many other airlines that fly into Southern Africa, it is very difficult for any of them to challenge SAA's supremacy there because of the centrality in Southern Africa of the airline's Johannesburg hub.

The only airlines that can fly directly from the U.S. to South Africa are South African Airways or U.S. carriers. Delta flies to Johannesburg from New York and from Atlanta, providing SAA's only competition in direct flights from U.S. to South Africa. United is a Star Alliance partner with SAA and provides its routes to Southern Africa through codeshare agreeements with SAA.

Some European and Asian airlines fly into South Africa, but must first fly to their home bases. Lufthansa, also a Star Alliance partner, flies into Johannesburg via Frankfurt. Emirates flies to Johannesburg via Dubai. Air France and British Airways fly to Africa via their hubs, but not to South Africa.

That leaves South African Airways with a major strategic advantage in being the airline for Southern Africa. But in order for SAA to fulfill that mission and to ward off competition, it needs a strong network of flights within Southern Africa, which it seeks to achieve through its regional airline partners AirLink and South African Express and its low-cost carrier partner Mango.

As American travelers expand their interest into Southern Africa, SAA and its partners are working to provide the routes to facilitate that penetration.

SAA flies to six continents, 28 countries and 39 destinations. Its partner network expands its reach to 62 countries and 186 destinations. The Star Alliance adds 160 destinations. SAA is aggressively working to expand its Africa network by adding destinations and increasing frequencies. It is targeting an expansion into western Africa as well.

SAA's Airline Triumvirate

Airlink is an independent regional carrier that has had a partner relationship with SAA since 1986. Airlink is independently owned, but SAA is a minority shareholder in the company. Using smaller aircraft than SAA's transcontinental fleet, Airlink extends SAA's reach deep into Southern Africa. Airlink flies to 55 destinations on the continent.

The expansion of the Skukuza airport in Kruger National Park gives SAA penetration into the Sabi Sands region, an area of high concentration of safari camps. Previously scheduled flights could not fly into Skukuza and had to fly from Johannesburg to Nelspruit airport, a two-hour drive from Kruger. The expansion enables travelers to avoid the two-hour drive and fly straight into the heart of Kruger National Park.

Another major opening of SAA's route structure took place recently with the addition of routes to Maun, Botswana, another route that took years to put in place working through various regulatory restrictions.

SAA's other principle partner in its quest of expanding its route network throughout Southern Africa is South African Express. SA Express is also government owned. It operates independently, but in close coordination with SAA and Airlink to create a comprehensive route network throughout Southern Africa.

SA Express' route network extends as far north as Lubumbashi, Democratic Republic of the Congo, and as far west as Walvis Bay Namibia.

With Airlink and SA Express siphoning SAA's international traffic to many points within Southern Africa with a myriad of low-volume routes, SAA is free to concentrate on expanding its reach internationally.

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