Page 59 - Aviation News (February 2020)

Airbus A300B4, ZS-SDF, arrives in Mauritius. The A300 replaced the 707s from 1980. Jozef Mols

replace its A340s but SAA management airline obtained a loan of R3.5bn from South The R21bn o er from the private
has repeatedly been unable to secure the African private parties. SAA promised that consortium and the possibility of repaying
required approvals from the government to under the new fi ve-year plan, the airline a large part of the company’s debts comes
place orders. would break even by 2021 with changes at a critical moment. The o er gives hope
In the domestic market, SAA faced afoot to help cut costs and stay afl oat. for the airline, as does the restructuring
many challenges, such as the increasing These include breaking up SAA into three plan. There would even be some money
competition. Mango, which had been parts, each with its own management, left to replace a few older aircraft with
founded by SAA as a low-cost airline, but no decision on this has yet been more economical models. But at the same
had been consistently profi table but was taken. Furthermore, the plan includes the time, this o er has political consequences.
too small to compensate the losses the implementation of capacity adjustments President Cyril Ramaphosa wants to wean
main carrier incurred on international and domestically and network optimisation in SAA o its state support, but mass layo s
intercontinental services. SAA had still to the regional and international markets. By could prove politically di cult in a country
cope with other problems. South African the end of 2018, SAA received an R21bn where a quarter of adults are unemployed.
Express was grounded by the South African o er from a consortium of local and A press release from the airline on
Civil Aviation Authority in March 2018 due to international investors in exchange for a December 5 stated it was going to enter
serious safety concerns. That August, some 51% stake in the cash-strapped airline. Both into business rescue South Africa’s
fl ights resumed following the issuance of South African start-up airline Fly Modern Ark equivalent of bankruptcy protection. It
airworthiness certifi cates for a portion of and Cerberus Capital Management are part said: “...the SAA Board of Directors and
the airline’s fl eet. of the consortium. the Executive Committee have been in
Government loans and guarantees were As part of the rescue plan, SAA has consultations with the shareholder, the
necessary as SAA’s bankruptcy could hurt signed a codeshare agreement with TAAG Department of Public Enterprises, in an
an economy already reduced to ‘junk’ status Angola Airlines on the routes between e ort to fi nd a solution to our company’s
by international rating agencies. “Selling SAA Johannesburg and Luanda and on the well-documented fi nancial challenges.
to a private partner or the bankruptcy of services between Cape Town and Luanda. “The considered and unanimous
the airline would make its debt immediately In 2019, another codeshare with Africa conclusion has been to place the company
payable and possibly collapse the fi scus,” World Airlines (Ghana) was announced. In into business rescue in order to create a
South African President Cyril Ramaphosa April 2019, SAA launched additional non- better return for the company’s creditors
told Parliament in November 2018. But stop charter fl ights to the Maldives. These and shareholders, than would result from
international banks pulled the plug on the extra services form part of the airline’s any other available solution.”
virtually bankrupt SAA. turnaround strategy – a pillar of which is to A statement from the Department of
Notwithstanding the very bleak outlook increase the utilisation of its aircraft. Public Enterprises revealed that R2bn of
for SAA, the management under CEO The fi rst of four A350-900s for SAA was funding will come from existing lenders and
Vuyani Jarana decided in 2018 to embark delivered on October 31, 2019. The type another R2bn from the National Treasury.
on a new fi ve-year corporate will replace the A340-600 on some routes. A decision from the government on the
plan. In order to survive, The fl eet currently comprises 11 A319s, ten proposed R21bn investment from private
SAA received a bailout A320s, 11 A330-200s/-300s, three A350- investors is awaited. So for the time being
of R21.7bn from the 900s, 16 A340-300s/-600s and two Boeing the future direction of the airline is ‘up in
government. Plus, the 737-300Fs. the air’.

One of seven A319s in the current SAA fl eet, ZS-SFI wears the new livery and titles
introduced in 1997. The Airbuses replaced the airline’s 737-200s. Key Collection

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