Mango sees recovery in 2010/11
November 17, 2009
CEO of South African low cost airline Mango, Nico Bezuidenhout, expects domestic air travel to resume positive growth by the third quarter next year, outside of the World Cup tournament.
Bezuidenhout added that year on year hints of a recovery were clearly visible this year but that aviation is not out of the woods yet.
He added that Mango is gearing for growth.
"While the World Cup is commercially lucrative, it does not present a heal-all for the aviation industry."
"Domestic airlines are reliant on year round business and leisure travel, and such a recovery only seems highly likely towards the late part of next year."
Bezuidenhout said that while signs of a recovery are visible, Mango will remain cautious and adopt a prudent approach to the current environment.
"Sales have recovered from negative the negative territories of 2007 and 2008 and we are now matching last year's levels. This, however, does not mean we are out of the woods."
"He said that global forecasts remain bleak but also notes that the increased international trend of investing in emerging markets may hold positive spin offs for South Africa and its aviation industry."
"The increasing importance of emerging markets on the global stage is highlighted with the economic successes of Brazil, Russia, India and China."
"Emerging markets have unleashed a massive growth surge in the world economy."
"Investor confidence, as the Financial Times reported last week, is evident in the tenfold increase of emerging market funds under management globally increasing to $563 billion."
"Along with this, the potential that this new investment mentality holds for South Africa, and the African continent, is immense."
"And regional and domestic aviation stands to benefit substantially."
Bezuidenhout added that the two major economic blows - the fuel crisis and subsequent recession - have also fundamentally changed the way in which both business and consumers make purchase decisions.
"Behavioural changes show a distinct value-seek mentality which, beyond the obvious benefits for low cost aviation, will see a conservative consumer approach for many years."
He believes that the market has started to adjust to this value driven approach, but as conditions slowly recover, this trend will emerge even stronger.
In aviation, said Bezuidenhout, low cost airlines will increase market share to well over 60-70 percent in the next decade.
"While South Africa has been shielded from total meltdown, no economy went unscathed."
"Aviation, which tracks economic performance closely, requires a rapid response to changing market conditions."
Presently, Mango is preparing for next year's World Cup and seeking new growth opportunities beyond 2010.
"We have proven that sustainably affordable airfares are possible and that a true, globally benchmarked low cost model is workable in South Africa," he concluded. - I-Net Bridge
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