ANT KATZ

Billionaire arms manufacturer Ivor Ichikowitz’s name had been mentioned before in regard to the battle for the low-cost skies. And now it seems that the rumours are true. Business Times said that Ivor, “a vocal supporter and funder of the ANC, has emerged as a pivotal player in the newly launched low-cost airline Flyafrica’s battle for the skies”.

Flyafrica launched six months ago and is owned by a private equity company based in Mauritius. It currently offers flights between SA and Zimbabwe, Namibia and Zambia.

The airline plans to open a base in SA this year, and boasts that it will be offering flights between Johannesburg and Cape Town at an unbelievable R50 each way.

Ivor is the founder and executive chairman of the Paramount Group – the biggest privately owned defence and aerospace business in Africa, bringing in more than R11 billion a year in sales.

He also owns a private-equity company called Transafrica Capital, which, according to Business: “insiders say is backing the new airline.”

‘Considering putting serious weight behind it’

Flyafrica CEO Adrian Hamilton-Manns denied to the Sunday Times that Ichikowitz provided cash to the new airline. But an employee at Transafrica told Business Times that the airline was “under our umbrella”. Transafrica invests in aerospace, telecommunications and property, among other things.

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Contacted last week, Ichikowitz told Business times that he was a close friend of Hamilton-Manns, and that he had helped raise funds for the airline. Ichikowitz said that while he wasn’t yet invested, he was looking at getting financially involved and was doing substantial due diligence on Flyafrica. “I’m considering putting serious weight behind it,” he said.

Ichikowitz added, however, that if he did invest, it wouldn’t be through Transafrica. Three members of the airline industry, whose names were not quoted in the Business Times front-page story, said they believed Ichikowitz was behind the company.

“It’s his,” said one. Another said: “He is the main funder.”

Ichikowitz was adamant there was nothing cloak-and-dagger about his connection to the airline. But pundits are sceptical about whether Flyafrica’s plans for the R50 Cape Town flights, would be sustainable.

Own planes

Hamilton-Manns, a past executive VP at SAA who has been involved in low-cost carriers around the world, said Flyafrica would be able to offer such cheap fares because it owns its planes outright and doesn’t lease them.

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 “This means we have a low cost of capital,” he said.

He said the airline would have a low staff complement, and its strategy was to be a franchise operation, in which it tied up with local carriers in different countries. The new entities would operate under the Flyafrica colours.

Flyafrica currently flies just three routes, but Hamilton-Manns’ idea is for it to juggernaut across sub-Saharan Africa this year. A third Southern African base – tipped to be Malawi – would probably be announced before the end of the month, with a fourth base in West Africa to follow.

Hein Kaiser, spokesman for Mango, said that “fares significantly below cost weren’t sustainable over extended periods of time… it can be expected that launch fares will fast climb to business-sustainable levels”.

Dave Andrews, CEO of Flysafair, said: “This is plainly not sustainable when the tax element of a domestic flight is more than triple that amount. “No airline can sustainably offer average fares which are below average costs,” he said.

Flysafair offers one-way trips of R499 between Cape Town and Johannesburg to passengers who book early, but essentially a mix of fares was charged.

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