Is there room for another Low-Cost Carrier?

Hey guys, just a topic i've been wanting to post for the last week or so.

Now I am a massive follower of Aviation and have always wanted to be a commercial pilot for an airline. At the same time though I am into entrepreneurship. I very almost started an online game and computer store with my best friend at the age of 15 but school was too important back then.

So I thought to myself, why not join the two and start a business in Aviation.

So here is what a want to do, start an airline based at CTIA serving routes to and from Cape Town.

I feel there is a real gap in the market for upper class seats so I like to add some first class seats on the aircraft similar to those on Virgin America aircraft at the front of the plane and then serve CPT-JNB, CPT-DUR, CPT-PLZ and other routes.

I know this is a massive thing to achieve and at this stage it's only really a dream, but at some point I would really love to make it a reality

First though, i'd like to see MyBB's opinions on whether there is space for another LCC in the market. Seeing that we have Kulula, Mango and 1time already out there, and then SAA and BA serving the more 'premium customers', do you think there is space for an 'LCC' with a touch of the premium side serving out of Cape Town? Also, what price would you be willing to pay for a first class seat similar to this of Virgin America?
One thing I don't want to do is to be like the current LCC's, I want that premium touch to be there in economy class, Personal TV's are a possibility, even mood lighting and slightly extra pitch when compared to LCC's of today

One of the things i'm told is most important before starting a business is researching the market and consumers, so I guess this thread counts right? I am young right now and think it will be quite a while before I get anything moving along, but I am planning everything right now in the mean time

Well thanks guys and hopefully if I ever do manage to get my dream going, you will all give us a try

If it priced right and service is good, then I would say it would not be one too many.

Price and service will be key. It's not just about being cheap, but also about your flyers becoming frequent flyers on your service.

So all the best.

McT said:

If it priced right and service is good, then I would say it would not be one too many.

Price and service will be key. It's not just about being cheap, but also about your flyers becoming frequent flyers on your service.

So all the best.

Click to expand...

Yup, Service will definitely be a key priority, happy flyers will become frequent flyers. If you don't care about them, they wont return.
Good price combined with good service is key I think. Ive been reading up on local airline growth and the LCCs are growing buy a significant margin every year due to the cheap price of tickets when compared to SAA/BA. So great service, cheap economy seats and then that small amount of premium first class seats at the front for those that can afford and want the premium service, I think it would work very well.

Thanks a lot for your input

You will face very stiff competition on the CPT-JNB route. Indeed the only way you will survive on that route is to provide travellers with an unique flying experience.

Your idea of the seating and lighting is a step in the right direction, viz. providing a pseudo-first class service at a economy class tariff.

The other option is to look at the routes that have been discarded by all the airlines and then plan a circuit whereby you can service many of them with a single flight. For example, there are no flights on the PLZ-BFN route. So a typical circuit could be CPT - PLZ - ELN - BFN - DBN - ELN - PLZ - CPT.

I, for one, would utilise that route as I have staff in all those places (except CPT).

The busiest route is naturally the CPT - JNB, but every airline is attacking that one!

MickeyD said:

You will face very stiff competition on the CPT-JNB route. Indeed the only way you will survive on that route is to provide travellers with an unique flying experience.

Your idea of the seating and lighting is a step in the right direction, viz. providing a pseudo-first class service at a economy class tariff.

The other option is to look at the routes that have been discarded by all the airlines and then plan a circuit whereby you can service many of them with a single flight. For example, there are no flights on the PLZ-BFN route. So a typical circuit could be CPT - PLZ - ELN - BFN - DBN - ELN - PLZ - CPT.

I, for one, would utilise that route as I have staff in all those places (except CPT).

Click to expand...

MickeyD said:

The busiest route is naturally the CPT - JNB, but every airline is attacking that one!

Click to expand...

Thanks McD.

I realise CPT-JNB is the busiest route in SA, and therefore the one with most traffic and revenue. So i'd like to also attack there as well and hopefully attract customers on that route from other airlines with the use of the little extra's I think would make a difference. PTV's, Mood lighting etc. When flyers realize how much a better experience they get on the airline, then they should use us frequently. In the beginning I could also make fares as cheap as possible on that route to attract a lot of flyers and obviously advertising is a key in attracting travelers.

Great idea as well in linking up all those towns not served by airlines. That could generate a lot of traffic. There will have to be a CPT-DUR direct though to compete with competitors but a flight on the route you suggested could be done once or twice a day i'm guessing depending on demand

I have only one thing to say regarding this topic: Minimum R75 per day for car parking.
Perhaps looking into a new LCC is turning a blind eye to easy money.

Rosaudio said:

Great idea as well in linking up all those towns not served by airlines. That could generate a lot of traffic. There will have to be a CPT-DUR direct though to compete with competitors but a flight on the route you suggested could be done once or twice a day i'm guessing depending on demand

Click to expand...

I see LCC are looking to short routes out of SA to our neighbouring countries. One of them, I recall, does a trip to Mauritius. It need not be daily flights to external destinations, depending on demand, it could be arranged once or twice a week, such as to Windhoek.

I don't think anyone here can answer your question accurately. You need market research.

Anyway, two things: JNB-DUR isn't viable for south coast travellers an more - cheaper and (almost) quicker to drive - especially Margate, but also Pennington. You might be able to fill the occasional flight to Scottburgh, Pennington and Margate.

The other thing is, only SAA carries firearms. So if I'm flying, I have no choice but to fly SAA. If your airline carries (I think you need some sort of courier licence), I'd have another option. Don't know how big the market is though.

Don't ruin yourself chasing unsustainable ideas, but that's just me being cautious.

Airlines = money sinkhole.

Rosaudio said:

One thing I don't want to do is to be like the current LCC's, I want that premium touch to be there in economy class, Personal TV's are a possibility, even mood lighting and slightly extra pitch when compared to LCC's of today

Click to expand...

Is this not a contradiction? How can a Low Cost Carrier have a premium touch? Once you add a premium to cost is is not low anymore...

Airliners are the least profitable venture you could go into.

MickeyD said:

The other option is to look at the routes that have been discarded by all the airlines and then plan a circuit whereby you can service many of them with a single flight. For example, there are no flights on the PLZ-BFN route. So a typical circuit could be CPT - PLZ - ELN - BFN - DBN - ELN - PLZ - CPT.

I, for one, would utilise that route as I have staff in all those places (except CPT).

Click to expand...

Good idea. However, I guess the very reason the other airlines dropped those routes is precisely because they are not financially viable?

davemc said:

I have only one thing to say regarding this topic: Minimum R75 per day for car parking.
Perhaps looking into a new LCC is turning a blind eye to easy money.

Click to expand...

Are parking costs not up to the Airport operator (ACSA) and not the airline?

McT said:

I see LCC are looking to short routes out of SA to our neighbouring countries. One of them, I recall, does a trip to Mauritius. It need not be daily flights to external destinations, depending on demand, it could be arranged once or twice a week, such as to Windhoek.

Click to expand...

WHK was a city I was looking into. Right now I don't see many CPT-WHK flights happening so it could be a route to keep in mind as demand could grow within the next 5 years or so. I have to keep in mind that SA/Neighboring counties are developing, and therefore the market will always be growing along with demand. So I myself believe there is always room for another Airline

Drunkard #1 said:

I don't think anyone here can answer your question accurately. You need market research.

Anyway, two things: JNB-DUR isn't viable for south coast travellers an more - cheaper and (almost) quicker to drive - especially Margate, but also Pennington. You might be able to fill the occasional flight to Scottburgh, Pennington and Margate.

The other thing is, only SAA carries firearms. So if I'm flying, I have no choice but to fly SAA. If your airline carries (I think you need some sort of courier licence), I'd have another option. Don't know how big the market is though.

Don't ruin yourself chasing unsustainable ideas, but that's just me being cautious.

Click to expand...

Yes I know market research is needed, and I plan to do that, this is just a thread giving my idea and asking what you guys think.

JNB-DUR isn't a route I was planning to do anyway, CPT-xxx routes are the plans bing a CTIA based airline. Thanks for the firearm suggestion, will look into it. That's exactly what I need, ideas that I can put into a plan and then work from there.

PhreakBoy said:

Is this not a contradiction? How can a Low Cost Carrier have a premium touch? Once you add a premium to cost is is not low anymore...

Airliners are the least profitable venture you could go into.

Click to expand...

Not at all. LCCs with the premium touch are out there. Look at Virgin America in the US, classified as an LCC but they have first class, Personal TV's, mood lighting and are already making a profit after starting up 3 years ago with all the stiff competition in the US from the likes of Southwest, JetBlue etc.

Premium touch will obviously add an extra premium to the cost, but if it's not much then i'm sure most wouldn't mind paying extra. Comapre Kulula/Mango to this - http://upload.wikimedia.org/wikiped...cabin.jpg/800px-Virgin_America_A320_cabin.jpg - and that's still a LCC

blunomore said:

Good idea. However, I guess the very reason the other airlines dropped those routes is precisely because they are not financially viable?

Click to expand...

Possibly, but there could be the demand in the future, which I could take advantage of. I'm guessing I still have 6 years until I do anything in which I could change my mind and also that is when then Airbus A320 NEO comes out which is the aircraft I plan to use.


Thanks all for the input

Give me enough space so that I can comfortably open up my laptop on the tray without having to keep the screen at a funny angle.
Give me enough room to put on a jacket without hitting the person next to me or contorting myself into pain.
If you're going to put something up on the screen, make it something interesting or optional, and make sure your screen and/or DVD player thing works.
That food is usually horrid and not worth it. You'd do away with a lot of waste (and wasted money) by giving out something people want instead, if at all. Chocolate chip cookies! Muffins with decent coffee! Good hot chocolate with little marshmallows on a cold day! We don't need to be fed on a 2 hour flight, but if it is going to happen, a snack people will enjoy rather than a meal they're going to give back is better.
Make it so my seat has allotted cabin space and that's it. I hate getting on a flight when it's nearly full and people have brought huge/too much carry-on luggage and I can't find a spot for my regulation-size bag. If their stuff doesn't fit in their allotted space and no one is willing to share, send it to join the rest of the luggage.
If you're going to have reading material, make it interesting.
If you have armrest radio thingies, make sure they work and play decent music with options, and maybe think about handing out headphones to use them.
Enough armrest space so I'm not wrestling for it with my neighbour or having to touch strangers.
No musty airplane smell!

These are just some of my gripes with the LCCs and other airlines. What can I say, I fly a fair amount . Change it, but maintain a decent price, and you'll have me as a loyal customer

EDIT: Just saw the pic you posted in the OP. Not sure if the reclining seat is worthwhile on short domestic/neighbouring country flights, but I like the space and decent seating. I can't say the screen is a must for a shorter flight either, but I guess it gives you enough time to watch a movie on a 2 hour flight and options if you don't want to read/work.
I like the idea. Now make it work!

For inland flights you dont need any luxuries. At most, a slightly more spacious section in the front with maybe some inflight entertainment for a bit more than the normal price can work for the fussy people. For my money even the LCC's we have now is still too expensive. Sure, they do have tickets every now and then for R350 a piece but then it is only av!ilable for a day or so and you have to book a flight days or months in advance. I want a cheap ticket whenever I want one, or at least a week in advance instead of months. The only way this will happen is with more competition. The problem is the huge capital needed to buy aircraft, and to service and store them. Most likely you will have to buy from the big guys. Interestingly, Mango only have 4 planes in their fleet, and still offer many flights, so it is quite a logistical challenge too. Maybe by servicing an unique route as your main attraction with some luxury option is a good starting point. Obviously you will still do and make your money with the main routes. I know kimberley-cpt has very little flights, and george can also work. I once did a jhb-cpt mango flight with a bfn stop. The flight was packed, and did not take that much longer. It was by far the cheapest flight so we took it. The people who complain about comfort, flight times and entertainment will opt for the normal airlines anyway. But most of us just want a cheap flight that goes as close to where we want, whenever we want to that will be faster or cheaper than driving there.

Are you loaded or u got some Multimillionaires bankrolling your venture ? I think you need to start off with a financial plan first and see if it will be viable. How do u plan on starting off with aircraft that will set you back $$$$$$ - it don't come cheap

I heard on the news today that South Africans can expect a new airline in our fair blue skies very soon. Company called Velvet Air. (Yes, I know it sounds very gay, but I promise it is not my company lol)

No details yet as to wether it will be a budget or premium airline. They are apparently already advertising for pilots and trolley dollies.

I wish planes had USB chargers on them - so if my ipod/phone battery needs to be charged it can be done while I'm sitting idle on the plane