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Piet van Hoven to hang up his wings after 28 years in the cockpit
March 17, 2006
By AUDREY D’ANGELO
Piet van Hoven,who retires at the end of June after 28 years as managing director of Comair, initiated changes that ended SAA's virtual monopoly of our domestic airline market and made flying affordable for a much larger section of our population.
His combination of caution, shrewdness, innovation and a knowledge of the airline industry enabled Comair to survive and grow when other airlines, including Flitestar and the original Sun Air - both of which were popular and well supported - went out of business.
It is still the only South African airline listed on the JSE and its interim results for the six months to December were impressive despite a rise of 40 percent in the price of jet fuel, which is its biggest expense. It ended the six months with a 26 percent rise in headline earnings.
I believe you started work at Comair almost straight from school when it was a small airline taking people to places like Skukuza. What attracted you to it and did you expect to rise to a top position in the industry?
Comair was started in 1948 by six former South African Air Force pilots including our current chairman, Dave Novick, who had all fought in the Western Desert during the second World War. The aviation industry was taking off in the 1960s and it appealed to me as offering some excitement and opportunity as part of a team.
I joined Comair in 1965 as a dispatcher in the operations room and trained myself in the [business] environment.
We developed a very strong team and I progressed up the ladder. I became traffic manager and then commercial manager before becoming managing director 28 years ago.
Were you competing with SAA on domestic routes when you joined Comair?
No, SAA had a monopoly of the most important domestic airline routes until 1990.
Other airlines could be licensed only to fly those in which SAA had no interest - crumbs from the table such as Phalaborwa, Richards Bay and Margate - and we served them with turbo-props.
But by 1990 the industry had been deregulated in the US and Europe.
We were able to persuade the government to allow some competition against SAA, allowing other airlines to enter sectors of the market that were previously closed to us.
We had only to convince the authorities of our technical competence and the fact that we had sufficient financial resources [to maintain a service].
Which was your first route in competition with SAA?
We launched a service between Cape Town and Johannesburg in 1992 with two return flights a day, with only one aircraft - a Boeing 737-200.
In addition to competing with SAA, which was a serious issue, we were also competing with Flitestar, which had four Airbus A320s and offered more flights.
But we thought it too much of a risk to invest in so many aircraft until we were certain the venture would be sustainable. In the first four years we gradually added three more aircraft to our fleet.
We now have 22 aircraft between British Airways/ Comair and our low-cost division, kulula.com.
BA/Comair has 13 and kulula nine. Kulula has larger planes because it has a higher number of passengers and low-cost airlines need high volumes.
However, the yield from each BA/Comair passenger is higher than from kulula's.
You don't give any indication of their separate market shares or respective profitability when you publish their results and there are occasions when people who have booked with kulula find themselves boarding a BA/Comair flight. Has kulula taken business from BA/Comair as well as from SAA?
We don't give out their results separately because kulula is a division of Comair but it's fair to say the two brands are equal [in terms of profitability].
They overlap to some extent and there are times when BA/Comair carries kulula passengers when it has seats available and there is heavy demand for kulula flights. BA/Comair is busiest during the week, while kulula's heaviest demand is from leisure traffic at weekends.
BA, whose franchise you hold, sold off its own low-cost airline, Go, because it did not fit with the BA image as a full-service airline. Did BA disapprove when you launched kulula?
No, they realised that there were important differences between the South African market and theirs.
Comair itself started almost as a low-cost airline, although meals and drinks were included in the fare. But it changed and became more up-market when you bought the BA franchise in 1996. Why did you become a franchise holder?
In the beginning our fares were 20 percent below SAA's and Flitestar's.
We had no lounges and instead of using an in-flight caterer, the cabin crew used to bring baskets of fresh rolls on board and prepare them in the galley. We aimed at the leisure market, while SAA and Flitestar competed for business travellers.
By 1996 the situation had changed. Flitestar was gone and we thought we had exhausted the leisure market. But the business travel market was tied to SAA's Voyager [loyalty] programme.
We started our own, offering a free flight for every 10 the passenger took with us.
But local flights were not an attractive incentive for business people who were interested in flying overseas and we realised we needed a long-haul partner.
We spoke to a number of carriers before deciding on BA. To secure their franchise, we had to model ourselves on BA, going through a training programme and offering a comparable service and more amenities.
It has been a very good relationship and we have both benefited from it. We have attracted business travellers and the connection helped to make South Africans more aware of the BA brand and brought BA a bigger share of the long-haul market from this country. They bought an 18 percent share of Comair in 1997.
BA/Comair and kulula are still expanding their local route networks.
BA/Comair has long-established routes into neighbouring countries and kulula has started to move into them with its newest service to Lusaka, which started on March 10, in which it does the flying on behalf of its partner, Zambian Airways.
Do you expect more growth inside and outside South Africa?
Yes, the economy is buoyant and we expect more growth in this country, although at a slower rate. We have applied for the rights to fly to Mauritius and are putting on charter flights there for two travel agencies in the meantime.
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