Is SAA becoming a travel agency?

It may sound contentious to say that SAA are becoming a travel agency, but I’ll be even more outrageous and say that so are Etihad, Emirates and many other airlines.

The issue at hand is codeshares.  If we forget about the Long Term Turnaround strategy for a second, the word which I’d use to sum up 2013 for South African Airways would be “codeshares”.  During the year SAA entered into or expanded codeshare agreements with 9 other airlines.

It now has codeshare agreements with 28 different airlines!  These airlines range from Emirates and Air New Zealand, to local carriers like SA Airlink, SA Express and Mango Airlines.

Because of the speed with which airlines around the world are adding to their codeshare agreements, it’s worth pausing and thinking a bit about the impact this will have.

In simplistic terms, a codeshare is an agreement whereby one airline sells another airline’s flights on its booking engine.  So, for example, South African Airways sells all of Mango Airlines’ flights on its booking engine. This means, that when you book a flight on the flySAA website you might end up on a Mango Airlines flight.

If you’re booking a South African Airways flight to Durban from Cape Town on the flySAA website, where SAA no longer flies to, you’ll end up on an SA Express or Mango flight.  In fact, out of the 7 flight routes to Durban you can book on the SAA website (from Bloem, CPT, Dubai, East London, Harare, OR Tambo & PE), it’s only the flights from OR Tambo which are operated by SAA.

So, instead of a travel agency showing you which airline is cheapest, you go onto the flySAA website and it shows you the cheapest airline!  As airlines add more and more codeshares into their booking engines, they become more and more like travel agencies, and less like a traditional airline!  We’re nowhere near the point, but if you pushed it far enough, an airline could potentially eventually make most of its money from selling other airlines’ flights!

The other repercussion is disappointing clients who don’t pay enough attention to what they’re doing (most of us clicked are guilty of clicking on the next button without having studied all the text). SAA does specify the airline operating the flight, but not with bright orange colours to indicate Mango for example, the booking engine remains in SAA’s blue colours.

Now, SAA is a full service carrier, so passengers weren’t expecting to fly on a low cost carrier, so it’s not just the case of it being a different airline, but also a different quality of service (e.g. legroom).

saa - time table

Other than disappointment at flying on an unexpected airline, codeshares are a win-win for airlines and passengers. Passengers have the possibility of cheaper flights and more extensive connections when they book on the flySAA website, whilst the airline has the possibility of additional profit. The management of South African Airways must be applauded for getting this strategy right.

Author: Rob Baker

Mainly involved with running South Africa Travel Online and a few other websites, also do some investment consulting

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