New low-cost airline for SA?

In recent weeks, I've been following reports of a new low-cost airline launching this year. Called Airtime, they aim to steal a march on the market by having cellphones as their major medium for ticket sales.

The Operation:

From what I can tell, they are starting out by leasing three Boeing 737's for a period of 6 months. Their ticket and pricing structure is a novel one: instead if using the internet as their major sales channel (as other low-cost airlines do) they are planning on having people buy 'Airtime' through their cellphones. You would SMS a number, specifying how many units of Airtime you want to buy, and it would be added to your cellphone bill. The Airtime that you buy is then exchanged for a flight ticket. The novelty is that you can use your Airtime for any flight on any of their routes. The amount of Airtime required is approximately equal to the flight time of your flight - eg. if you were flying from Durban to Jo'burg, you would need 75 minutes of 'Flytime'. The price of Airtime is then multiplied by the current rate on offer to come out with the ultimate cost of the flight. For example, the usual rate may be R5 a minute. For a flight from Durbs to Joeys, you would then pay R5x75=R375. For higher demand flights, the price per minute, or multiplier, would increase to say R6 or R7, increasing the overall cost of the ticket. Specials or promotions may then come out, offering minutes at R4 or R3 each. From what I can gather, this would allow you to pre-buy airtime when a special offer is on, but only use it later in the year when you needed it. The supposed kicker is that any Airtime you don't want to use is converted back into standard cellphone airtime by your network. They will also have the usual internet and phone-in ticketing options as well.

Based out of Durban (which they say is the playground of SA), they are looking to initially operate the Joburg-Durban route, and then add Cape Town in the very near future.

The issues:

The major one is that they're not operating as a separate entity, but working off a licence of Aquarius Aviation from Lanseria (whom they are also leasing the planes from). Now, while this keeps initial costs down, it is causing problems with licensing and getting authority to fly from the aviation authorities. They have already marketed their flights as commencing in mid-January, but they seem to be hitting some resistance from the CAA (Civil Aviation Authority), who are apparently only due to meet towards the end of the month to decide on granting the licence. This could mean an embarassing backtrack on their promise to be flying, and could dent their credibilty seriously before they even get off the ground. Nevermind how bad it would look if the whole thing gets canned by the CAA!

Also, their marketing reeks of inefficiency and haste. There have been many complaints and comments on bulletin boards on various websites about how their website was not up yet, and no call centre numbers went through (although those were older comments - the website was online when I tried it). Their 'i-Fly' logo is FAR too similar to the 1Time one (with the red tailwing featuring); and, while summarising the service nicely, the whole name 'Airtime' is too easily confused with more-established 1Time's, diluting their brand value immediately. Also, for a company positioning itself as a credible threat to the incumbents in the industry, there's been very little media buzz about their potential entrance (I only happened to spot it as a small mention in a small article in a minor newspaper). This is a symptom of some very bad PR and a mish-mash marketing strategy. If I think back to the launch of some of the other low-cost airlines, they stirred up a fair amount of hoo-hah when they launched. Granted, maybe it's Airtime being cautious, but they could be doing a heck of a lot more...

Also, being based out of Durban is puzzling to me. The other entrants have started on the lucrative Joburg-CT route, and seem to be doing okayish. My first impression is that Durbs is all they could get as a base, but let's see if they prove me wrong.

So, in summary, this could be an interesting time for aviation in SA. I'll be following this one closely, so keep checking for updates, but if they don't jack themselves up soon, this airline could struggle to take off...