Third country carriers ‚Äúflooding” market

Third country carriers ‚Äúflooding” market
By admin

Third country carriers are flooding the market with capacity and eroding Qantas and South African Airways business on routes to southern Africa, airline regulators have been told.

South African Airways said 30% of South Africa-bound traffic and 44% of Australia-bound passengers are being captured by airlines with 6th freedom rights.

These figures will grow as additional frequencies are granted, placing more pressure on Qantas and SAA.

In a letter to the International Air Services Commission (IASC) – reported in Travel Today yesterday – SAA used the threat of third country competition to bolster its argument for the codeshare to continue.

The emergence of such carriers has been “rapid and dramatic”, SAA said.

“These airlines are redirecting traffic away from the primary carriers… flooding the market with tremendous over capacity of deeply discounted coach,” SAA said. “Since 2007 South Africa has seen a 78% increase in seat capacity from these third country carriers. Australia has experienced a 47% increase.

“This makes it even more difficult for the primary carriers in the market to compete effectively with our own non stop services.”

The absence of a QF-SAA codeshare would “exacerbate the situation”.

SAA pointed to a codeshare between Singapore Airlines and Virgin Australia that “aggressively aims to carry South African traffic from Australia through Singapore”.

“The more traffic is diverted through other hubs the more SAA and QF will have to reduce capacity in order to accommodate the lessening demand,” it said.

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