Miles vd Molen of CemAir, SA’s #3, shares insight on BP divesting, pricing tips and managing during turbulence

In the past four years, 21-year-old independent airline CemAir has trebled in size to now sit snugly in SA’s number three spot behind Safair and Airlink – a position that is comfortable for founder and CEO Miles vd Molen. In this update on the SA aviation sector, vd Molen shares his insights into the best (and worst) days for price-conscious flyers; retaining the culture in a fast-growing business; and how Cemair is coping in SA’s turbulent sector where global players Swissport and Air BP are in the process of divesting.


Timestamps for the interview below:

  • Miles van der Molen on Air BP leaving South Africa – 00:45
  • The alternative fuel stations – 01:15
  • Fuel shortages becoming a concern and grounding flights – 01:45
  • What to do in an environment where fuel is no longer locally refined – 03:15
  • When and how the public is affected – 03:55
  • CemAir’s growth and expansion – 05:50
  • On the market still returning to its pre-Covid levels – 07:50
  • Price wars and whether there is sufficient capacity to still be made up – 09:25
  • Professionalism in the industry – 12:10
  • Keeping a culture of organisation amidst rapid growth – 13:30
  • The status of South African Airlines – 14:35
  • Potential partnerships in the future – 17:10
  • Where CemAir is on the list of domestic carriers now – 18:00

Some extracts from the interview:

On CemAir’s growth and expansion

We are continuing to grow. Our domestic schedule or network is the busiest it’s ever been with most destinations in most major cities in South Africa. We’re adding East London shortly, which is sort of the last one of all of the major centers to add. Our regional expansion continues to be part of our plan. So we recently received the approvals from the Botswana side to operate frequencies that we’ve had for some time into that country. So we’ll be launching Gaborone and with lots to follow – everywhere from Mozambique to Zambia to DRC. We had a very long cycle in getting the approvals from both sides. But we were well on track and in fact will even be launching a regional expansion which is what we see driving the second half of this year.

Read more: Best of 2022: Cemair now SA’s #3 airline – expands flights to fill Comair/SAA vacuum

On the market still returning to its pre-Covid levels 

We’re still encroaching – our market shares are increasing in absolute terms, and the market is still returning from its pre-COVID levels. I haven’t seen figures for about the last two months, but it was around about 70 to 80% of what it was pre-COVID levels. It’s a little unclear exactly what the full recovery will be. One of the natural results of the state sponsored competition is that effectively less people are flying. And whether they realize it or not, they blow the cost of operating service. That made it very difficult for any competing airline to sustain. But it gave the incumbents the ability to continue to sell a product at those levels because of the annual fiscal enhancement. So as the prices have risen, which is necessary, again, market forces will tend to decrease the number of passengers as some people find that it’s more expensive than an increase in budget. So we aren’t expecting a 100% recovery to pre-COVID levels for a year or two yet. And a lot of it does depend on the trajectory of the country’s economy, because airline passenger volumes do track the economic fortunes of their nation to a large extent. 

On price wars and whether there is sufficient capacity to still be made up

Not at all. I mean, the second half of January is a natural slump in the market as everybody returns to work. And we saw one player operating on excessive capacity and some destinations had extremely low prices. So, for example, you could fly to Durban for R360, including all taxes and VAT and everything, which is well below the cost to operate the service. And in some markets, on certain days, we’re seeing that sort of pricing continue. But certainly on peak days we see a normalisation of the pricing. And I say it’s normalisation because if you look at the cost of a ticket in South Africa and compare it to other markets it is not dissimilar. The cost of operating an aeroplane in this region or any other is more or less the same. So we don’t take the exchange rate effects out of it. So I think if anything, flying in South Africa probably could soon become more expensive in the coming years. 

Read more: Cemair’s seven-year wait for SA airline ‘normalisation’ pays off – airline has quadrupled since pre-Covid

On potential partnerships in the future

Indeed. Partnerships have always been part of our strategy, and we have interline relationships with many of the major carriers, including Qatar and Emirates, and we’re hoping to add BA in coming months. It’s fairly far advanced and obviously there’s many forms of partnerships. So we’re very much open to it. We do believe particularly, sort of what’s going to become a consolidation phase, post-COVID, that if partnerships are key and then forming new relationships now and into our future, because once those relationships are formed, they’ll be relied upon for for years to come. The markets have come through so much turmoil that all the existing relationships kind of got mixed up a bit.

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