New Airline for South Africa?
Could a new airline be on the cards for South Africa? Former CEO of Comair, Gidon Novick, plans to start a new domestic airline before the end of 2020. This will take advantage of a travel industry that has changed fundamentally due to COVID-19, requiring more efficiency, cost-consciousness and a simpler way of flying. He plans to use an existing air service licence and the capital from a couple of private investors with experience in the industry to launch a small airline that will focus on one or two trunk routes using a large-gauge narrow-body aircraft. “We don’t plan to be massive or to grow very quickly; keeping it simple, tight, reliable and efficient.”
Novick is already putting together supply chains, partners, key executives and designing a unique brand, which he remains secretive about. The new airline will be distributing directly but also work with the travel trade. No traditional loyalty programme is envisaged, as it would add unnecessary complexity and costs.
“With an aviation industry that has been turned upside down, there is an opportunity from a cost viewpoint to create something very efficient relative to what existing airlines are able to do,” he explains. “Travel is going to change fundamentally post-COVID. Business travel will decline and air travel will require efficiency, cost consciousness and simplicity. There is a unique opportunity for a fresh, clean and well-structured airline that can be very competitive.”
On entering a cash-strapped industry that is already struggling to restart as air travel demand remains low, Novick says: “Our capacity will be small and we will not make a major difference to the capacity of the industry.” The caveat is that the market must return to some degree of normality before start-up. “Timing is critical and we are in no rush,” he says.
Challenges to overcome include lockdown regulations, new bio-security protocols, low demand because of economic realities, and people’s fear of flying. “It requires a careful approach and we will take our time and wait until people are comfortable to fly again.” Novick is well known in the industry, having revolutionised SA airspace with the creation of the country’s first low-cost carrier, kulula.com, in 2001. His father, Dave Novick, headed Comair for 51 years.
After leaving the airline industry, Gidon spent three years at Discovery as CEO of Vitality and Head of Digital. In 2016, he founded Lucid Ventures, the Cape Town-based Section 12J venture capital fund behind the Home* Suite Hotels boutique brand, which he continues to run.
He plans to involve “experienced and talented people” who – with other airlines in business rescue – have been retrenched and are looking for new challenges. “One of the joys of middle-age is that you have the combination of experience and energy; and we are going to make the most of that,” he quips.
Novick has long been a self-proclaimed optimist about SA tourism. “South Africa is still an incredible tourist destination. Tourism is the one industry where we can compete at a global level to earn foreign currency.
Business travel looks grim in the short to medium term and leisure travel will take time to recover, but tourists will come back. Airlines have an important part to play in enabling the economy. I’m very amped to play a small part in that story of the success of our country.”
