cape town scaled
Here’s our updated model through October 2024. Note the data uses fiscal years.
Notes:
- Passengers and flights are softening as the summer holidays start, which is not a great sign.
- However, the airlines manage capacity tightly, as we see PAX/flight firming. This is a crucial point because the domestic market is highly competitive. To make matters worse, the state is pushing South African Airways back into the market.
- An annualized projection suggests 36 million passengers in 2024, the same as last year.
- Page 4 shows an interesting trend: Cape Town’s (CPT) international traffic attracts larger passenger loads per flight. Moreover, CPT accounts for ~15% of domestic traffic but ~24% of international traffic. Indeed, as the lower chart shows, CPT’s share of international traffic is growing rapidly. This trend is confirmed by the US DoT data for US-South Africa traffic.
In summary, this market is becoming more competitive and is already the most competitive in Africa. Will there be a shakeout? There have been rumblings about Safair’s ownership for months, and matters are coming to a head. As tough as this market is, Airlink has attracted an investor, providing the airline with valuable capital and traffic. Almost certainly, a shakeout is coming, and that might not be a bad outcome.
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