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Send  Share  RSS  Twitter  24 Nov 2009

TRAVEL: Expensive Oil Doesn't Mean Expensive Mango

 





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Low cost airline Mango said today that it will not increase its fares due to an escalation in the fuel price this year. Crude prices are approaching US$ 80 a barrel. CEO Nico Bezuidenhout says that despite the anticipated fuel price increases due to higher oil prices, Mango would not increase its fares due to fuel costs this year.

“It has been a challenging year for consumers,” says Bezuidenhout, “and as the oil price continues to climb, a fuel price increase is becoming highly likely before the festive season. Should this occur, Mango will absorb these increases and not up fares due to fuel costs over the holiday period this year.” He adds that the airline guarantees this until New Year’s Day (1 January 2010).

The barrel price of crude oil now sits at near double its lowest floor price late last year. While still well under the crisis range fuel prices reached recently, currency fluctuations and the global financial crisis negatively affected airfares. “Low cost airlines, however, are better placed to manage economic turbulence,” says Bezuidenhout. Traditionally, low cost airlines are well placed to manage fuel price increases.

“Beyond a business model that dictates operational efficiencies, new generation aircraft, such as the Boeing 737-800 aircraft Mango operates, allows for greater fuel efficiency, ultimately making air travel more affordable.”

“December holiday bookings are looking good,” says Bezuidenhout, noting that he expects a solid festive season. “While we may still be in the midst of a recession, South Africans are still travelling. This year though it is evident that holidays are on average slightly shorter than last year,” and, he says, that he expects low cost airlines to perform well over the period.


 
 
 
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