Anyone want to partner SAA?

22 Apr 2013

South African Airways (SAA) was already implementing its turnaround strategy‚ with the airline in the process of seeking more airlines to partner with‚ acting chief executive Nico Bezuidenhout said last week.

Image: GCIS

The drafting of the long-term turnaround strategy was a condition set by the Treasury for the R5bn guarantee extended to SAA last year. Public Enterprises Minister Malusi Gigaba said the plan would be shared with the Cabinet next month as parts of it would not only require government approval but active support.

"The plan is being reviewed internally before it is shared with the Treasury‚" the department's director-general‚ Tshediso Matona‚ said last week.

The Treasury will ultimately have to approve the strategy as it will list the significant capital requirements of SAA‚ which must buy new‚ wide-body aircraft if it is to stop losing money on its continental long-haul services.

Bezuidenhout said the acquisition of a new wide-body fleet was crucial to the future financial sustainability of the airline. "The airline was preparing to begin negotiations with aircraft manufacturers at the beginning of May‚" he said.

SAA had also renegotiated acquisition terms of its new domestic fleet and was focusing on costs through aggressive supplier management‚ he said.

Just how much money will be needed has not been disclosed but prior to the guarantee‚ SAA had been seeking about R7bn.

On Friday (19 April)‚ the department said that central to the airline's turnaround would be the integration of the state's aviation assets into a single holding company as subsidiaries of SAA Group Holdings. The financial statements would be consolidated into those of the holding company.

Gigaba announced that Monwabisi Kalawe had been selected as the chief executiv e of SAA. Kalawe was still employed by contract food services company Compass Group and would need to work out his notice period.

Bezuidenhout‚ who has been central to the drafting of the turnaround plan‚ remains the chief executive of Mango.

Last week‚ SAA finalised a code-share agreement with India's Jet Airways augmenting the reach of SAA's direct flight to Mumbai and synchronising flights to nine other cities in India.

Bezuidenhout said SAA already had a similar agreement with Jet Blue in the US that existed outside of the Star Alliance programme.

An announcement on similar agreements was expected to be made next month.

Source: I-Net Bridge

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