- The Washington Times - Monday, January 12, 2009

How would you like to stop worrying about constantly fluctuating airfares and their annoying conditions and penalties, and simply pay a flat per-minute rate based on your flight’s distance? You could buy air minutes and “top them up” when they run out.

That’s exactly what the new Airtime Airlines in South Africa is promising its future customers. Its motto is “Pay as you fly,” and it’s advertising a frequent-flier program called iFly on its Web site, which shows scheduled flights between Johannesburg and Durban beginning Jan. 25. It also plans to fly to Cape Town and Port Elizabeth.

“You can top-up with iFly airtime, anytime, then make a booking within 90 days and fly within 365 days of your iFly airtime top-up,” the site says. “If you don’t book for whatever reason, you will get a cell phone airtime top-up voucher for the full value of your purchase for the mobile network of your choice.”

The current rate, which is likely to increase, is about 63 cents per minute, or about $47 for the 75-minute flight between Johannesburg and Durban, including taxes. A round trip is double that price. Air time can be purchased online or by text messaging.

The Durban-based airline is backed by the Blackbird Aerospace Corp., whose chief executive officer, Vino Eargambram, dismissed skepticism that the time is not right to start a new carrier, given the state of the airline industry. In fact, “the depressed market meant that we secured great contracts with our suppliers,” he told South African media last month.

Since then, however, Mr. Eargambram has been silent, which has raised suspicions that his plans may not be going as well as he expected. In his December interviews, he said that Blackbird had partnered with a Johannesburg-based aviation company whose planes Airtime would use, but he declined to name it. Later, it emerged that the partner was supposed to be Air Aquarius, but its CEO, Gavin Branson, was quoted as saying last week that the deal had collapsed. That leaves Airtime without aircraft or an operating license.

Earlier negotiations with Nationwide, a South African carrier no longer in business, also broke down, and Mr. Eargambram vowed not to repeat that airline’s mistakes.

Airtime’s concept, though not entirely new, intrigued industry watchers in South Africa and Britain, where the carrier has received the most media coverage. Airline pricing has become so complex and sometimes illogical that customers have a hard time understanding it. Experts often begin seminars on the subject by pointing out that each passenger on an average flight most likely has paid a different fare.

Air fares have long been based not on distance, but on market demand. That’s why, most of the time, prices from Washington to the West Coast are lower than those to Richmond or other Virginia cities, for example. So for Mr. Eargambram to persuade investors that his idea is worth their money is no easy task.

In the United States, the closest a major carrier has come to flat fares is Southwest Airline’s pricing structure, but it takes into account market demand as well as other factors. It also has different fares on the same routes based on flexibility, time of purchase and seating.

While Southwest is notorious for sparking “fare wars” in the markets in serves, early predictions that Airtime will do the same in South Africa were quickly dismissed by the country’s other carriers. There are still unanswered but important questions about the new airline, and its Web site offers very limited information.

What happens if a flight is canceled? Do a passenger’s air minutes go back to his or her account automatically? Are there penalties for making voluntary changes, or can one just hop on another, more convenient flight? Does the rate depend on how much in advance a booking is made?

It’s still not clear if Airtime will take off as planned Jan. 25, and industry analysts aren’t holding their breath.

“It’s an interesting concept in that it flies in the face of traditional airline pricing, which is mostly specific to market demand, not to distance,” said Patrick Smith, a pilot and airline expert. “With a taxi-style pricing scheme, an airline runs the danger of pricing itself out of profit on shorter routes with high demand. Thus, I can’t see this model being very practical on a large scale.”

Click here to contact Nicholas Kralev.

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