While regional carrier Airlink has long been an established player in the market, it has under founding chief executive Rodger Foster taken the chance created by rivals’ troubles in South Africa to expand into new markets in its own right
Having operated steadily out of the spotlight for the first 28 years of its life, South African regional carrier Airlink has seen a radical step change over the past four years.
The financial collapse of the flag carrier for whom it had long operated flights and the wider ill-health of South Africa’s airline sector has been a catalyst for Airlink to not just step out of the shadows and operate flights in its own right, but to embark on the biggest growth chapter in its history.
Small wonder then that Airlink’s Rodger Foster, founding chief executive of the airline back in 1992, believes the time is right for the carrier to take stock.
“It is time for consolidation right now,” he tells FlightGlobal. “We have grown phenomenally over the past three years, when you think about where we were pre-Covid and where we are now. We are operating a fleet of 66 Embraer regional jets and 85,000 flights per annum. It’s a very different business now from where we were before.
“You have to pause for a bit and catch your breath. It’s all well and good adding aircraft to your fleet but the more complicated your business, the more frequency you have, the more flights that you have, the bigger your risk.
“There are additional growth opportunities. We will keep them on our radar,” he adds. ”But for now it’s a case of let’s make work what we’ve got, and make it work in an optimised way. Continuous business improvement is an area that becomes essential.”
AIRLINK MAKES ITS NAME
While the disruption of the pandemic has played its part in the carrier’s recent rapid growth, it was the financial challenges of South African Airways which meant it had to act. The carrier, then operating as SA Airlink, was flying with a franchise agreement for the national carrier. But a new course of action was required when SAA’s debt challenges caught up with it and the flag carrier entered a formal financial restructuring in December 2019.
”Fortunately we had the foresight to put in place a contingency because we could see it was a possibility that South African Airways could fail,” Foster says, enabling the airline to activate its own booking system in January 2020.
Two months later all passenger flying in the country was halted as Covid lockdowns were implemented. “That gave us a bit of respite in a way,” says Foster. “On the one hand we had activated a booking system, but on the other hand we were able to do some soul searching on exactly who we are and what we are.
”It was at that point we recognised we can’t just be a network system that is a component of a composite system. We need to be a network system as a standalone.”
What emerged was a rebranded, independent carrier. The airline in October of that year began operating under the Airlink brand and its own 4Z designator code, and a month later rolled out a new livery for the carrier to match its new front-facing positioning.
“While Airlink was a franchise of South African Airways, we were not recognised, especially within the travel trade fraternity because it was always the SA code,” says Foster.
”Establishing the brand is difficult. It’s a big investment. We have committed a lot to marketing and advertising the brand, we’ve done it through different platforms,” he says. That includes successful sports sponsorship within South Africa, notably the country’s domestic 20:20 cricket tournament.
Foster is pleased with the brand progress so far. “We stepped up to the plate and we were recognised as being there when an airline was needed and I think that helped endear the Airlink brand to the travelling public,” he says.
MARKET OPPORTUNITY
That in part reflects the troubled landscape of the South African airline sector at the time skies reopened after the pandemic.
Not only was SAA still grounded at the time, the plug had also been pulled on its regional carrier SA Express; its low-cost unit Mango has been grounded since the summer of 2021 amid its own drawn-out restructuring process; and British Airways franchise partner and Kulula operator Comair went through its own restructuring before ultimately collapsing in the summer of 2022.
It meant that while many of the regional routes within southern Africa that Airlink had traditionally operated were still off-limits in the early post-pandemic stages, the carrier was able to stake a claim on domestic routes it had previously not served.
“It gave us out the opportunity to tap into routes like Johannesburg-Cape Town, which still remains about the 10th busiest city pair on earth. If there was a route that would quickly reactivate, it would be that one,” says Foster.
“Gradually more and more routes became available to address as the lockdown eased and so we established a comprehensive network of destinations,” Foster says. That has included increasing its presence on international trunk routes within the region. “In some instances, like Namibia, we had to push our way through aeropolitical barriers to gain access to markets like Johannesburg-Windhoek,” he explains.
“We are prominently present in all these markets. And that has applied across the entire sub-region. We have been able to open up routes to destinations like Dar es Salam and Nairobi, and there is a whole bunch of those where we are present where we were not present before.”
Developing that network has also helped Airlink fill the gap for international carriers seeking new partners in the region, notably including BA after the Oneworld carrier lost its South African franchise partner Comair.
”We now have 35 of those relationships, five of which are codeshare relationships with some of the most relevant airlines to the markets in South and southern Africa. Emirates, United, Lufthansa, Qatar and BA,” says Foster.
”What that has enabled us to do, in conjunction with how we have set up our schedule to this array of 45 destinations and 60 routes, is we have been able to provide intensified connectivity with the flights of our partner airlines. And that has positioned us prominently to all of those destinations.”
REBUILDING INDUSTRY REPUTATION
While airline failures in South Africa brought an opportunity – for example, revived national carrier SAA remains in the relatively early stages of its recovery – these financial challenges and groundings have also taken a toll on the reputation of the airline industry as a whole within the country.
”I think air transportation in southern Africa is tarnished because of the number of airline failures,” says Foster, noting this had created headaches beyond simply restoring consumer confidence in the sector.
“For example, raising capital is impossible because no banks will touch airlines. So we’ve had to look after our financial integrity as well. How difficult has it been for Airlink to establish itself? Extremely so because of how the industry has been damaged.”
Central to the airline’s philosophy of building confidence in the sector, even while recognising the commoditisation of South Africa’s domestic air travel market, is the quality of its service.
”We stepped up to the plate and we were recognised as being there when an airline was needed”
“You have got to be competitive,” Foster says, but he adds that he is seeing increasing customer loyalty to the product. ”[There is] a very big difference between sitting in a high-density narrowbody versus a beautiful Embraer 190 where you have got two by two [seating],” he says.
Airlink has grown its fleet around a wide mix of Embraer regional jets, operating everything from 37-seats ERJ-135s upward to Embraer 195s seating 107 passengers.
”It’s a premium brand. it’s a premium product that we offer and the reliability has been there. Our on-time performance over the past three years has been best in industry,” he says.
Maintaining a robust operation, however, has been far from easy, given the wider supply chain-related issues that continue to impact the supply and upkeep of aircraft across the industry
”It is all well and good expanding your fleet, but how do you keep your fleet in the flight line all the time?” asks Foster. ”We do have a philosophy of having a back-up aircraft and having aircraft dedicated to maintenance. But aircraft in the maintenance cycle are tending to dwell, especially with heavy maintenance checks. We just aren’t able to cycle aircraft in the time we ordinarily would.
”The biggest problem is supply chain under the OEMs. We’ve even had aircraft on the ground because we can’t find an LED lamp for a navigation light. As absurd as it is, those are the kind of hiccups we’ve been dealing with. It’s a phenomenon that is beyond any of the aircraft manufacturers, it’s a bigger phenomenon.”
CHALLENGING ENVIRONMENT
This compounds the pressures in a region which has long been a challenging environment for local carriers to operate in.
For example, retaining pilots remains tough in the face of attractive competitors. “There is a global shortage of pilots and we’ve become a bit of a training academy for some of the bigger institutions,” Foster says. ”We have had a high rate of attrition of pilots and we’ve embarked on recruitment and are busy with training. But you can’t always train at the rate of your attrition. The succession takes time because you’ve got to recruit and train.”
Similarly access to routes and markets, in a region still governed by bilateral agreements often restricting prime routes, is particularly challenging for non-flag carriers.
”Another barrier I see as significant is more often than not, the national carrier being a state-owned entity – and I’m not talking about South African Airways here at all – [means] they don’t have a profit imperative. So when you are competing with them you are always competing with an airline that doesn’t have to make money. They can drop their prices through the cracks to gain market share or keep you out of the market. And we’ve been up against that in numerous instances.
”We want to be sustainable, so everything we do, we try to be as sustainable as we can be,” he says. ”You have to live within your means. Ultimately you have to be able to fund whatever adventure you embark on.”
Against this backdrop of growth, Foster says the key is to ensure that costs are minimised and revenues maximised.
”There are additional growth opportunities. We will keep them on our radar”
”There is no doubt that growth comes with pain and we have taken pain,” he says. ”That’s the reason why it’s a good idea to pause for a bit and just slow down and make sure your operating systems, your protocols are all up to a standard that is required to support a business the size Airlink has become.
”Having been here 32 years now, I have seen this business grow from a staff complement of 32 to a staff complement of 2,600; from a fleet of three or four aeroplanes to a fleet of 66; from just a few flights a day to 250 flights a day. And let me tell you, without a robust operational system and a phenomenally strong executive leadership group of subject matter experts, this is not as easily achievable as it seems.”