Regional South African carrier Airlink has grown from strength to strength over the last thirty-three years. Having weathered the storms of the COVID-19 pandemic and still forging ahead with strategic expansion, the airline seems set to continue a streak of success in a very competitive market. Gravitas recently caught up with Airlink and CEO de Villiers Engelbrecht on the airline’s recently announced acquisition of ten new Embraer E2 family aircraft, and what lies ahead in the near future.
Airlink seems to have been a poster child for stability and consistent performance over a long period of time in a very challenging environment. In the thirty-three years since it was founded in 1992, the airline has grown from smaller domestic routes in South Africa to regional routes in other parts of the continent, and seems set to extend its reach as it expands its fleet. CEO de Villiers Engelbrecht says that flying this all Embraer fleet of varying sizes and ranges is the key to operating to 45 destinations in 15 countries across Southern and East Africa as well as St Helena Island. The airline has steadfastly held on to a business model that prioritizes responsible capacity management, which sets it apart from airlines like FlySafair. Engelbrecht is of the opinion that Airlink’s business model is far more sustainable than that of low-cost airlines in the country.
“Airlink has no desire to dominate the domestic market. There is no economic appeal in market share, our interests are more aligned to building a sustainable and enduring business in which our balance sheet has sufficient absorption to take calculated risks and pursue opportunities that present themselves from time to to time.”
“Although there is limited overlap on some routes, eg. Johannesburg-Cape Town, Airlink works on a completely different model to the other South African-based operators. Airlink is all about providing best value to our customers by providing a comprehensive network of destinations and routes together with convenience that comes with the frequency, availability and timing of flights, with sufficient capacity to feed and de-feed our own and our commercial partners’ networks. Unlike the low cost carrier model, we do not commoditise air travel.”
Indeed, Airlink has fostered strategic partnerships with large carriers across the globe, and codeshare agreements with some of the dominant carriers from the Middle East, Europe, USA and Australia are a key differentiator for them.
The airline operates a fleet of Embraer aircraft ranging from its smallest E-135 to its largest E-195 aircraft. Airlink has moved on from its days operating a mixed fleet of smaller Embraer models and BAe Jetstreams to where it is now, having 68 aircraft of strength with ten latest generation Embraer E2 series aircraft coming.
“The various Embraer aircraft that comprise Airlink’s fleet are ideally suited to the various markets and destinations we serve. The majority of flights are from Airlink’s primary hub at Johannesburg’s OR Tambo International. However, post-COVID, it has also been developing its network from a secondary hub at Cape Town International Airport and also increased flights from Durban’s King Shaka International Airport.”
The fleet of Embraer family aircraft are currently maintained in-house by Airlink, being able to do line maintenance, airframe major checks and cabin refurbishments at its facilities. The airline is also set to open its own paint shop soon, which will remove it’s reliance on third-party providers for this purpose.
Challenging environment
Engelbrecht also shared some of the biggest challenges the airline (as well as other domestic airlines) grapple with in South Africa. The decay of services like ATNS, which he says has lead to “extraordinary economic and reputational damage” is one such example.
South Africa’s Air Traffic and Navigation Services (ATNS) has seen a huge decline in effectiveness over the past few years, with failed leadership being responsible for basic infrastructure being left to expire, with well publicized flight delays and cancellations happening over a long period of time due to instrument approaches at some of South Africa’s key domestic airports not being maintained, removing the ability for any of South Africa’s carriers to conduct approaches in less than ideal weather. And as Engelbrecht points out, the thousands of affected passengers were quick to lay blame at the airlines, most of the time being none the wiser as to why these delays and cancellations were happening. ATNS have since recovered from this somewhat, with many of these previously affected approaches now back in use, however it has a long way to go before it could be thought of as being effective in it’s role in the country.
Engelbrecht also pointed to the hugely expensive fees that carriers are charged to operate to and from South Africa’s main airports by the Airports Company of South Africa (ACSA).
“These factors also challenge the historical assumptions that have underpinned ACSA’s business model for OR Tambo International and require fresh, commercial thinking with the emphasis on providing operationally and financially efficient and reliable infrastructure, equipment and services, especially when airlines and their customers are paying top dollar charges for these.”
Potential in the E2
Challenging market aside, the airline has set it’s sights on it’s next big step, and that is the acquisition of the Embraer 195 E2. The airline recently announced that it has signed a lease agreement with Fort Lauderdale-base Azorra to lease ten newly built Embraer E-195 E2’s.
Engelbrecht said that the airline enters a daunting new chapter with this next step.
“It is an exciting and daunting moment for Airlink. Exciting because it heralds the next phase of Airlink’s development and growth as the leading regional airline in Southern Africa and now possibly beyond. Daunting, as there is a lot to do in the weeks ahead before the first aircraft enters service, hopefully in December this year, but I have no doubt that the Airlink team will deliver, as they always do.”
The Embraer E2 is one of the latest line of single-isle airliners that possess highly fuel efficient engines that have set them apart from older generation aircraft in terms of fuel efficiency and range. The E2 was first brought into service by Norwegian carrier Widerøe in April of 2018, and has since been introduced into service by fourteen different airlines across the globe, and Embraer have 175 E2 family aircraft still on it’s order backlog, having already delivered 161 airframes.
The E2 will place Airlink in range of destinations as far as Nigeria, Ghana, Ethiopia and island destinations in the Indian Ocean that may not have been economically viable before. Airlink’s furthest destination from its hub in Johannesburg is currently the island of Saint Helena, which is operated with a fuel stop in Walvis Bay for contingency. When the E2 is introduced it will add much needed fuel efficiency on high density routes it already flies in addition to the further reach that may open up new destinations in future, should the airline be able to unlock those routes.
Deliveries of the ten E195-E2s from Embraer’s facilities in Brazil, will begin later this year and be
completed in 2027.
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