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Rodger Foster — and how Airlink has outlived its peers

Rodger Foster — and how Airlink has outlived its peers
Ray Mahlaka
By Ray Mahlaka
10 Dec 2024
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The outgoing CEO of Airlink reflects on being at the helm of the airline for nearly 33 years and how it has managed to survive SA’s volatile aviation industry.

At least 40 airlines in South Africa have collapsed since 1992 — a transformative period during which the country’s aviation industry was rapidly deregulated by the post-apartheid government to make it easy for competitors to enter and exit.

In South Africa’s skies, there was once Avia, Nationwide, Flitestar, 1time Airline, Sun Air, Fly Blue Crane, Interlink Airlines, Velvet Sky, Skywise, Kulula.com, Mango Airlines and SA Express. 

These airlines and many others are now defunct, forced to shut their doors after failed restructuring and rehabilitation attempts. They couldn’t keep up with the air travel industry, which closely mirrors the state of the economy (during an economic downturn, travel volumes tend to become depressed).

The industry guzzles a lot of capital while profit margins are wafer-thin, and is intensely regulated and competitive (airfare price wars have been seen in South Africa). Even investment doyen Warren Buffett is not prepared to pour money into airlines and their stocks because the industry is volatile. 

And yet Airlink, a privately owned regional airline in South Africa that traditionally flew in underserved towns, has survived while many around it have crashed and burnt. “When you count the number of peers that have failed, it’s a horrific number,” said Rodger Foster, the co-founder of Airlink, which was founded in 1992. 

At the time, Foster and his business partner, Barrie Webb, successfully bid for Link Airways, which was liquidated, joining the ranks of many failed airlines. Foster and Webb bought the assets and infrastructure of Link Airways, later renamed Airlink.

On Airlink’s survival for 32 years, Foster attributed it to three factors; forging lucrative partnerships with global airlines, keeping an eye on the balance sheet so that operating costs don’t gobble up revenue, and supporting staff to improve morale. 

Supporting staff in times of adversity 


The latter was more evident during Covid lockdowns, which floored the entire aviation industry as flights were grounded and airlines were forced to cut costs by cutting jobs. Airlink made a contrarian decision. 

“We looked after all of our staff. We didn’t lose a single job throughout Covid. This is testimony to our attitude to staff in terms of looking after them, their best interests all the time, but also up-skilling them,” Foster told Daily Maverick.

A careful eye on the balance sheet


Airlink has also been cautious and “very conservative” when it comes to managing money, ensuring that debt is paid back, debt covenants are not breached, and having enough working capital for emergency scenarios. Foster said the company had also taken a conservative approach to expanding its airline operations while some of its competitors had been aggressive on growth, which later came back to bite them. 

An example of aggressive growth in the industry is Comair, the now-defunct company that ran Kulula.com and British Airways flights in southern Africa. In 2013, Comair concluded an agreement with Boeing for the purchase of eight Boeing 737 Max 8 aircraft as part of its move to more fuel-efficient planes and also to expand its route network. Shortly after the purchase, two Boeing 737 Max 8 planes belonging to Ethiopian Air and Lion Air crashed in 2018, killing more than 300 people and putting their aviation safety into question. The grounding of its new Boeing 737 Max 8 aircraft resulted in Comair pencilling in millions of rands in financial losses, portending its ultimate collapse.

Lucrative partnerships


The third aspect of Airlink’s survival is linked to it forging partnerships with airlines. 

The first partnership came about in 1997 when Airlink entered into franchise agreements with state-owned airlines, South African Airways (SAA) and SA Express, allowing among other things, for the airlines to share their networks, intellectual property, and cross-sell airline tickets on their platforms. Foster said the partnerships with SAA and SA Express were “mutually beneficial” as “we were able to coexist symbiotically with SAA and develop a network of destinations which were useful to the collective network”. 

However, the partnership was also frustrating as SAA blocked Airlink from exploring flight routes such as Cape Town to Harare or Victoria Falls (Zimbabwe), with the former airline saying it wouldn’t be in its best interest. 

The partnership further broke down when Airlink claimed that SAA owed it R890-million for flown and unflown air tickets before SAA went into business rescue in December 2019. The dispute ended up in the courts, which ruled in SAA’s favour.

Read more: SA Airlink wants to sink SAA business rescue proceedings

After 23 years of working together, Airlink and SAA terminated their franchising agreement in 2020. 

Reflecting on this saga, Foster believes it was a blessing in disguise as the termination of the franchise agreement meant that Airlink could go it alone and explore opportunities that SAA would ordinarily block. “We are now free to do what we want, and we’ve been able to grow the business,” he said. 

Since 2020, Airlink has also forged commercial ties with 30 other international airlines, incorporating 40 commercial agreements. These include code-share partnerships with many of the world’s leading airlines, most recently with Air France-KLM. The partnership with Air France-KLM means that its customers can easily access a range of destinations in the southern Africa region via Johannesburg and Cape Town airports, through Airlink. This means more customers, global ones, for Airlink. Another code-sharing agreement with a leading airline is set to be announced soon. 

In August 2024, Qatar Airways acquired a 25% equity stake in Airlink, which injected capital into the airline that would be used to fund its sustainability and growth.

Underscoring the growth is that Airlink operated 63,629 flights during its 2019 financial year, which swelled to 83,576 by 2024, representing a 24% growth. It carried 1.91 million passengers in 2019 vs four million passengers in 2024, a nearly 200% increase. This has translated into revenue growth of R11.6-billion in 2024 (from R4.9-billion in 2019). 

After nearly 33 years as the CEO of Airlink, Foster will step down on 31 March 2025. At 68 years old, he has already surpassed Airlink’s retirement age (65).

He will hand over the baton to de Villiers Engelbrecht, the chief financial officer who has been with Airlink for 20 years. Asked about his next plans, Foster said they involve playing more golf and supporting Airlink management behind the scenes.

“I will stay on as a significant shareholder in the company and continue playing a role as a non-executive on the board of directors. I’m accessible all the time. If there’s any question from the executive leadership, I’m available to impart the institutional knowledge and memory that I’ve built up over the last 32-and-a-half years.” DM

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