Air Namibia said on Monday it had taken a decision to suspend the Gaborone route as part of the company’s broader rationalisation strategy in line with global aviation and recessionary development.
The airliner’s General Manager Commercial Services, Xavier Masule, told a press conference the whole business plan will be reviewed, although he could not say when they will resume the service.
“There is limited traffic numbers on the route, which we knew from the beginning, but hoped that the introduction of a direct service would help grow these traffic levels between our sister cities,” Masule stated. “Though we recorded growth in traffic numbers, and we have frequent flyers on this route, levels are not sufficient and will take a very long time to reach desired economic levels.”
Air Namibia introduced the Gaborone ÔÇô Windhoek route in May 2012. It initially operated three flights per week, on Tuesdays, Thursdays and Saturdays. It was changed to Tuesdays, Thursdays, Fridays and Sundays when the airline re-arranged our entire network.
During that period to the present, it had managed to capture 80 percent of the market and had 294 flights, but its operating margins were negativeÔÇöwhich led to the airliner deciding to suspend the route.
However, the Maun operation will continue although it could be rationalised with the Victoria Falls route. Masule also dismissed suggestions the route might have been introduced without market study being conducted.
“Air operation is a decision that is costly. You cannot do it without a market study. We did our studies,” he said.
The commencement operations on the Gaborone ÔÇô Windhoek route were in May 2012 and operated three flights per week, on Tuesdays, Thursdays and Saturdays. It was changed to Tuesdays, Thursdays, Fridays and Sundays when the airline re-arranged our entire network.
He revealed on Monday that world economic outlook remains challenging in the airline industry and added that the Euro Zone crisis is the most serious threat to the global economy.
He pointed out that the United States is showing positive signs but economic growth and job creation has been weak, adding that airline yields are under pressure due to soft demand.
“The airline industry continues to become more competitive and consolidation and rationalization has resulted in larger and leaner competitors. Economic trouble in mature markets has led airlines to seek opportunities in emerging markets such as Africa,” said Masule.
He stated that they will, however, continue to be active in the Gaborone market by continuing to be in Botswana, with sales visits and maintaining contact with the travel trade. He pointed out that the airline has interline they  will use as their offering for air service from Gaborone via Johannesburg, the Gaborone Johannesburg leg being served by Air Botswana and the Johannesburg-Windhoek  leg being operated by Air Namibia.
“We currently have two flights per day between Johannesburg-Windhoek and another option is via Maun where we operate four flights per week, Air Botswana would operate the Gaborone-Maun leg and we operate the Maun-Windhoek leg,” said Masule.
Regarding the international challenges the company is facing, he said that Emirates, Qatar Airways, Etihad gulf carriers are committed to dominate and to make their mark. He stated that there is growing interest in Africa by North American carriers. Masule added that European Airlines have significantly increased capacity to Africa.
“Air France launches Freetown, Monrovia, Bata and Cape Town this year; KLM launches Kigali and Luanda for a total of 38 destinations. Lufthansa including Swiss, Austrian, British Midland and Brussels Airlines, now have a total of 39 destinations,” he stated.
On the regional challenges, he pointed out that Ethiopian, Kenya Airways, and South African Airways are focused on executing distinct business strategies. He said all three are building intra-African connections and they are also linking Africa with the world, but competition from larger, better capitalized foreign competitors is tough.
He noted that South African Airways (SAA) has shifted to a more regional approach by growing its intra-Africa services. Masule said that it is currently seeking additional support from the government. He observed that Kenya Airways stated goal is to serve all African capitals by 2014 but progress has slowed and added that it is still on track to double fleet in the next five years. He stated that Ethiopian Airlines most consistently profitable airline in Africa has ambitious growth plans (Vision 2025) and is creating new subsidiaries in other parts of Africa.
“We captured 86 percent market share, but this translates to a load factor of 35 percent, meaning even if we have 100 percent market share we will still be having lower than 45 percent load factor,” said Masule.
