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New SA airline to fly, even as crisis grips market

Current cost structures are about 40% lower than they would have been pre-pandemic: Lift co-founder Gidon Novick.
Image: Shutterstock

A new airline is preparing to start flights in South Africa next week, entering the industry at a time when carriers near and far are going bankrupt amid the worst crisis in aviation history.

Lift, owned by Johannesburg-based leasing company Global Airways, will operate three Airbus SE A320 jets and look to tap returning domestic demand after an almost five-month ban on inter-provincial travel to contain the Covid-19 pandemic. The airline is looking to take advantage of plunging startup costs due to an oversupply of idle planes and low oil prices, according to Co-Founder Gidon Novick.

“The opportunity is here now to go into the consumer airline space — especially given the current environment,” Novick said in a phone interview.

“The current cost structures are about 40% lower than what it would have cost to start an airline before the coronavirus.”

While European airlines struggle to stay afloat during the slower winter season and a resurgence of Covid-19 cases, Lift will start flying at the height of the South African summer and just as millions of people travel to holiday resorts and family homes for the festive season. Competition has also thinned slightly with the grounding of South African Airways, which has been in bankruptcy protection for a year.

Lift’s first flight is scheduled for Dec. 10, and the carrier will link Johannesburg with Cape Town and George – a small coastal town in the middle of the Garden Route, a popular area for holidaymakers.

Slow revival
South Africa’s domestic aviation industry was laid low by the pandemic, but is now slowly coming back to life.

State-owned Mango and closely held FlySafair are back up and running, while Comair came out of administration and resumed flights on December 1. The operator of the Kulula brand and the local partner of British Airways secured backing from investors and lenders in September.

“There is an oversupply of aircraft as many have been given back to the lessors or sold,” said Novick, a former Comair co-chief executive officer and founder of tourism investment group Lucid Ventures.

“There are a lot of very highly skilled people available at the moment – this also plays into supply and demand – and there is the use and availability of maintenance infrastructure.”

At risk to Lift and the more established carriers is the potential for a resurgence in virus infections, and sharp increases have been reported in two coastal provinces. President Cyril Ramaphosa issued a warning about the surge in a speech on Wednesday night, and announced fresh restrictions for a particularly severe hotspot around the town of Port Elizabeth.

“Many think it’s crazy starting an airline in these times,” Novick says on Lift’s website. “We think it’s the best time ever.”

© 2020 Bloomberg L.P.

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Best of luck guys !!

To lift or not to lift?

A nice uplifting article for a change

I lift my hat off to you guys for your stunning initiative

All the very best!

The one thing that should be plainly obvious to every South African – even those illiterate – is that the ANC is extremely poor at making sound decisions based on economic and financial principles.

Of course they are even worse at implementing any decisions that they make.

It really is self-evident.

Hats off to Lift! Entered the naming competition and got R150 off my first lift-off with Lift; plus they’re not charging any cancellation fees! The only challenge now is be to stop the baggage pilferage at OR Tambo and Cape Town International. If you can get that right for your paying passengers you’ll have a competitive advantage second to none.

“…George – a small coastal town…”
Maybe Moneyweb should edit some of the drivel copied from Bloomberg.

True. What rubbish. George airport is fairly large, very busy and services a vast area, something Fikile apparently also was ignorant of.

End of comments.

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