New rewards and more international partners: how Mango’s CEO plans to overtake FlySafair
- Mango new CEO hopes to regain market share lost to FlySafair by providing a new business class offering, and an overhauled bookings platform.
- His big focus, though, will be on-time performance – which deteriorated to 72% in the past year.
- Mango did not “properly consume” its rapid market growth, which resulted in operational decline, and consumers heading to competitors, he said.
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State-owned airline Mango wants to claw back the marketshare it lost to FlySafair, which grew into South Africa’s largest domestic airline in 2019.
Among its plans are a new business class offering, an overhauled bookings platform, more international code-sharing partners, and rewards programmes.
But being on time will be high on the list.
Also read: With SAA at death's door - here's how FlySafair became the biggest domestic airline in six years
Mango’s parent company South African Airways (SAA) is cancelling several domestic routes as part of business rescue proceedings.
Mango itself hopes to return to profitability, CEO Nico Bezuidenhout told Business Insider South Africa, after two consecutive years of losses.
It remains unclear how large those losses were as its financials have not been released, because SAA has not released financials since 2017.
Chief among Bezuidenhout’s interventions will be to improve Mango’s on-time performance to above 90% by the end of March, after that number declined to 72% in the past year.
“If you're not punctual, you're not on the game," says Bezuidenhout.
Other key interventions Bezuidenhout seeks to implement include:
- A simplified costing structure with no hidden costs, clearly communicated.
- Revising the timetable of flights, with more planes to Zanzibar on the cards.
- Introducing a “premium economy” offering for business class travellers in the front of aircraft, who may want to be separated from crying babies so they can work.
- Introducing a new reservations platform.
- New code-sharing agreements with airlines such as Lufthansa, which lands at OR Tambo and has passengers who need to travel onward to airports such as Durban.
- Partnering with existing rewards programmess for frequent flyer benefits.”I tend to be in favour of giving consumers choice,” Bezuidenhout said. “Everything is at a price, of course.”
- Additional routes.
Bezuidenhout said most of the interventions have already been approved by Mango’s board, and he would like to see most implemented by the middle of the year.
Some of Bezuidenhout’s initiatives, such as the closure of Mango routes to and from the secondary Lanseria airport outside of Johannesburg, have already seen implementation.
“Some of these things have got a bigger turning cycle: integrating new codeshare relationships presupposes you already have a new reservations platform in place,” Bezuidenhout said.
Bezuidenhout (who was reappointed CEO in October after leaving the airline for two years) said one of Mango’s key failings the past two years was its on-time performance.
FlySafair, by contrast, has a 95% on-time performance rating, making it the most on-time domestic airline in 2019.
Bezuidenhout blamed Mango’s rapid growth, which he said was not “properly consumed”, and one or two “poor route decisions” for the airline losing market share.
“It had an operational impact. And that coincided at a time when competitors were adding substantial capacity into the market so consumers then had to look for something else and found it.”
Additionally, problems at the SAA Technical division that looks after its planes exaggerated Mango’s on-time performance decline.
“One of the key reasons why we've managed to get our on-time performance is because we've managed SAA Technical much closer and provided very hands-on oversight that has had the desired effect and will be doing more of the same.”
He said when on-time performance improves, so too does staff morale and profitability.
“That means you optimise the use of your assets. That means your unit cost comes down. And then you can offer a lower fare.”
“If you're not punctual. You can imagine if you're a crew member and if it's the 20th time today that I have to say sorry for being late, it’s difficult to smile while you say sorry.”
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