TNW pick of the week: 1time faces tough times

1time Airline faces a tough couple of months, following its announcement that it applied for business rescue on August 21 as it is in financial distress.

But the travel industry remains hopeful that the airline will continue to serve the domestic and regional market. “From a market point of view there is definitely business available for the airline,” says aviation expert, Linden Birns.

He also notes, however, that there is only so much an airline can do in terms of adjusting fares to compensate for higher costs. “The airline is saddled with old aircraft that cost a lot to maintain. Also, with the current price of fuel being what it is, the less fuel-efficient aircraft add to cost pressures.”

Rod Rutter, coo of XL Travel, told TNW he hoped the airline could recover from this. “It is never good when a domestic carrier falls.

“The airline’s ability to recover from this will depend on several factors, such as its cash flow, the oil price and an increase in passenger numbers, as the domestic market is currently overtraded.”

Meanwhile, Allan Lunz, md of Bidtravel, says rumours about 1time’s financial situation are nothing new and adds that anyone looking to book the airline in the long term should exercise caution when doing so.

To see the full article see the next TNW issue, 29 August