A visitor gets off an airplane of the new airline Lift during its launch at O.R. Tambo International airport in Johannesburg, South Africa, December 9, 2020. [Reuters]
A new domestic South African airline launched on Wednesday, betting on low operating costs and oil prices to withstand an industry crisis that has left national flagship SAA struggling to survive and sunk other low-cost carriers.
The new carrier, Lift, part-founded by former Uber Africa executive Jonathan Ayache and Gidon Novick, who ran low-cost flyer kulala.com, said it planned to avoid a cash-heavy operational model that hit its rivals.
"We're fortunate, operating costs are as low as they've ever been. Obviously that's subject to the exchange rate," said Novick. "Oil prices are pretty low. Aircraft values have almost halved, and people costs are also low, so we see a real opportunity."
The rand is its firmest in 10 months against the dollar. Global oil prices crashed to a two-decade low in April, only recently returning to pre-Covid-19 levels near $50 per barrel.
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