South African Airways will need to undergo an ‘extraordinary intervention’

In Africa, Airlines by katyLeave a Comment

South African Airways (SAA) is not only South Africa’s national flag carrier but also their largest airline. However, it is currently reaching out to the government for extra funding, in a desperate bid to renew its aging fleet.

The airline’s CEO, Monwabisi Kalawe, has said; “We are doing this replacement programme over a period 10 to 15 years and expect the first two planes to arrive somewhere in 2017/18.”

The programme Kalawe speaks off will involve replacing up to 30 planes in a long-haul fleet overhaul, which will cost around 60 billion rand ($5.2 billion). The airlines aim is to create a sustainable fleet, by ensuring the planes are more fuel-efficient.

In 2013, SAA reported an operating loss of 991 million rand ($92 million). It has put these figures down to rising fuel costs, and ‘unprofitable routes.’

Losses such as these, has caused great concern to Public Enterprises Minister Lynne Brown, who has said; It has become clear to me that simply extending state guarantees to the airlines is an inadequate response to the challenge and an extraordinary intervention is required to put them on a sustainable footing and to support their turnaround efforts. It might mean we have a different business model that rationalizes the two companies. SAA is a national asset, it’s a strategic asset.”

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(Flickr: Paul Robbins) 

AirXperience Europe 2014

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