FlySafair is prioritising expansion on established routes over developing new connections as high airfares and growing price sensitivity among South African travellers make stimulating demand increasingly difficult.
FlySafair’s Chief Marketing Officer, Kirby Gordon, said while booking windows remained relatively consistent, higher fares were affecting conversion rates.
“We haven’t seen a dramatic change in underlying behaviour or booking windows amid the higher airfare prices; the clearer signal is that fewer customers are buying at current fare levels,” explained Gordon.
“Load factors are softer than they were and a slightly smaller proportion of flight searches are converting into bookings because travel is expensive.”
Proven vs new routes
As a result, FlySafair is refining how it deploys aircraft capacity, drawing a clear distinction between entering established markets and stimulating new point-to-point routes.
“These high prices are a major consideration and encourage a more cautious approach to both destinations and timing. There’s an important distinction between entering an established market and creating a new direct connection as a low-cost carrier,” explained Gordon.
While developing new domestic connections, such as Gqeberha to Lanseria, requires substantial investment to stimulate demand, established routes present a lower risk in the current travelling environment.
“Our new Johannesburg-Lusaka route, set to launch next year, for example, already has people travelling between the two cities, searching for direct flights and comparing fares. So we are adding a lower-cost choice to an existing market,” said Gordon.
“Before COVID, the route offered around 4 300 one-way seats a week, returning to that level in mid-2023. Today, four airlines offer almost 5 000 seats a week. Our entry in February next year will take that to around 6 000 and introduce a low-cost option. There will naturally be a period of adjustment but we believe there’s an opportunity to stimulate demand and support further growth.”
Conversely, establishing a new connection such as Gqeberha-Lanseria required more work to build awareness and demand, making it a less comfortable proposition in the current cost environment, said Gordon.
Regional growth
With this strategy in mind, FlySafair reported that further regional expansion might pose an opportunity to increase capacity, competition and offer lower-cost fares on established routes.
“Regional expansion is certainly an opportunity, particularly on established routes where a lower fare can make travel accessible to more people,” said Gordon.
“This could serve corporate and visiting-friends-and-relatives traffic, but the key consideration is whether the market can support our aircraft size and operating model. FlySafair will assess further opportunities route by route.”
