Investigating long haul inbound airline price competitiveness: a study of South African Airways

Abstract

The national airline of South Africa (South African Airways), reported major losses for a number of consecutive years due to a significant fall in average fares triggered amongst others by intense global competition. This research compares fares offered on long haul direct inbound routes into South Africa. Neutral Units of Construction and Maximum Permitted Mileage values obtained from the dominant global distribution system used in South Africa were used for fare comparison purposes. Results indicate that in many instances South African Airways (SAA) was found to be highly competitive, offering the cheapest available fares in the market on the routes it served. From the research it is clear that the long haul inbound South African Airways fares are competitively priced. It is suggested that the airline uses this as a marketing tool to enhance inbound sales. As this research eliminates inbound price competitiveness as a major contributing factor to the financial losses of the airline, it is suggested that further research is conducted investigating other internal and external factors and fares that may contribute to airline profitability and sustainability for the future.