SOUTH Africans now
have a national
aviation asset that
is well on its way to relative
stability,” says SAA acting
ceo, Nico Bezuidenhout.
He was speaking at a
media briefing earlier this
month, where he provided
feedback on the conclusion
of SAA’s 90 Day Action Plan.
The plan, which concluded
on March 24, was a roadmap
to stabilise the carrier and
resume full implementation
of a refined Long-Term
Turnaround Strategy, he said.
“There is no doubt that while
we have achieved significant
milestones during the 90-day
period in review, the real task
of full implementation of a
refined LTTS is at the starting
block.”
Within the 90 days, the
airline managed to implement
and effect several changes
that address some of its
major financial issues.
Total annualised EBITDA
improvement, from the
commencement of its
new financial year on
April 1, would amount
to R1,25bn as per the
initial target as agreed in
November, Nico said.
SAA expects to save around
R440m per annum as a
result of cutting its direct
flights between Johannesburg
and Beijing and Johannesburg
and Mumbai.
The airline has also
renegotiated a deal with
Airbus, first made in 2002,
to receive 10 of the 20 A320
aircraft it had on order. SAA
will no longer receive 10
A320s, rather, it will take
delivery of five A330 widebody,
fuel-efficient aircraft
that will better serve its
medium-haul African routes.
These will come on stream
in 2016 and will save the
airline R1,4bn.
The airline realised
R290m savings relating to
fleet financing/composition
changes and R425m
from reviewing onerous
agreements, including over
150 procurement contracts.
“Anyone who has a contract
with SAA that is up for
renewal should expect a 15%
reduction in costs as part
of SAA’s new procurement
structure,” Nico said.
The SAA Board has
investigated several future
funding models for the
business and will table
recommendations to National
Treasury.
This includes plans to
privatise parts of SAA
operations as well as
pursue a public listing of
its subsidiary, Mango. Nico
said there was buyer interest
in some of the constituent
parts of the group and that
government would make a
decision in the first quarter of
the new financial year, which
began this month.
Regarding recent reports
that suggested SAA was in
talks with both Air China and
HNA Group’s Hainan Airlines
that could see the airlines
take a stake in SAA, Nico
said SAA was “not in talks
about selling itself to any
other airline right now”.
“I accept that the selling of
SAA is the most interesting
thing we can talk about,”
Nico said. “But that does
not change our business,
our operations. What we, as
a management team, need
to focus on is having an
efficient and effective entity
that ideally you would not
want to sell.”
