In September, commenting on South Africa’s only truly independent airline going into bankruptcy protection to reorganise, I asked the question “will 1time run out of time and become another lost carrier in 2012?”
On November 2nd, CEO Blacky Komani announced that the “1Time board, together with business rescue practitioners, decided to suspend services with effect this afternoon“. Planes in the air at the time flew back to the Johannesburg base. All other scheduled flights remained grounded. South African banks promised their Credit Card customers full refunds for any tickets bought using their cards. The National Consumer Commission began investigating claims that 1time was selling tickets just hours before ending its services knowing that they were about to go under.
On November 6th, the airline filed for provisional liquidation. On December 11th, The North Gauteng High Court will rule on the final closure of the business. According to 1time, the liquidator’s ultimate objective is to revive the company and save jobs. The CEO has said that a UK investor was looking at options. Media speculation suggested that the investor might be Fastjet which is commencing operations in Tanzania at the end of November (see route map here). Fastjet is the brainchild of Easyjet founder Stelios Haji-Ioannou and plans to operate across Africa. South Africa would be a perfect complement to their strategy. A Tanzanian base and a South African base would make it easier to expand through Angola and Botswana into Ghana, Nigeria and Zambia.
On the other hand, it might be cheaper and easier for Fastjet to expand organically into South Africa with its own brand name. I don’t think that 1time really offers them much now- a loyal customer base yes but from what I can see 1time collapsed because their load levels were only around 70 per cent. No airline is viable at this level. In addition 1time has no useful planes as its MD80s are way too fuel inefficient.
These facts will weigh heavily on any other potential investor especially as the South African air market is already very crowded with four airlines (albeit two airlines and two subsidiaries) and any new carrier will need to successfully differentiate itself enough to make money. Two more complicating facts. Firstly, SAA owned Mango is planning to expand beyond South African borders on its regional routes to Zanzibar, Mombasa and Livingstone. Secondly, the previous 1time CEO is planning a new low cost carrier for South Africa.
The current CEO of 1time, said he was emotional at the time of service suspension. Possibly because the airline has gone and probably because he put his own family home up as security to buy into 1Time a year ago. He loses that security on December 11 unless Fastjet rescues him. In the meantime 1time are the 24th airline to close in 2012 (although Air Zimbabwe are back it seems)