IN MARCH 2007, I wrote a letter to this paper (Mango bitter fruit of monopoly) in which I predicted Mango would be used as SAA’s vehicle to crowd out competition in the low-cost airline market. This is how monopolies operate.
Five-and-a-half years later, 1time is gone. It will now cost my wife and I R8,838 to fly return to East London from Cape Town on SAA for Christmas, roughly double what I’d ever have had to pay with 1time.
SAA can charge this ludicrous rate now because 1time was their only competitor on the route.
There is a lot of really cool stuff you can do for nearly R9,000, which is a less stuffy way of saying that the cost of flying SAA is high.
Many have argued that the reasons for 1time’s liquidation are independent of SAA’s monopolistic behaviour.
We shall have to wait for the rigorous investigations to be done before making a judgment call. But I cannot accept that 1time’s decline was solely attributable to poor fleet management and the rising costs of fuel and maintenance on an old fleet.
In a truly competitive environment, profit margins would likely have been slightly higher, as trying to compete against a state-funded Mango drove 1time’s prices below what they would have been in a competitive market.
Call it speculation because I don’t have a counterfactual. Call it what you like, the argument and prediction from 2007 stands:
"Mango, subsidised by the taxpayer, was devised to destroy 1time and Kulula. Thereafter, it would simply drive up prices again and make a ridiculous profit thus damaging the very consumers whose taxes fund the airline."
South Africans, please wake up and stop flying with a morally hazardous airline. If we don’t boycott, who will?
Claremont, Cape Town
• This letter was featured in Business Day's print edition with a photo of a Mango plane that should have been credited to www.southafrica.to.