Town at 18h40 and arrive in
SAA is on track with
the implementation of
its turnaround plan,
showing strong year-to-date
performance, above budget
for both revenue and nett
loss reporting. The airline
has already completed all
‘route surgery’ and does
not have plans to cut more
routes.
However, SAA still expects
to report financial losses of
approximately R5,2 billion in
the 2018/19 financial year
and a further R1,9 billion
in the 2019/2020 year.
The airline hopes to report
profits thereafter.
The five pillars of the
turnaround are: winning
the battle for the domestic
market; becoming a focused
player in the international
market; becoming a
player of substance in the
regional market; becoming
a commercially focused
organisation; and being
a leader in customer
experience.
SAA’s route performance
shows that, of its domestic,
regional and international
sectors, only its regional
(into Africa) sector is
currently profitable, with only
Entebbe reporting a loss.
“There are positive
signs of turnaround in
the domestic market with
three of the four routes
now yielding profitability at
route level,” said Vuyani.
He explained that the
rationalisation of routes to
Mango at the end of 2017
had been beneficial to SAA’s
domestic turnaround and
said only the Port Elizabeth
route was currently making
a loss.
Regarding a regional
African focus, Vuyani said
West Africa was high on the
agenda, saying the airline
was pleased with the current
West African presence. He
said SAA was also looking
at ways of maximising its
presence in that region. “For
example, we have metal
that sits in West Africa for a
number of hours. We could
look at retiming this route
to allow this aircraft to fly to
London and back before it
heads back to Johannesburg
in the evening. This would
suit the Ghanaian market
and maximise our exposure
to Ghanaian passengers,”
he told TNW.
Internationally, Washington
is SAA’s only route making
a profit at present. All other
routes are in the red but,
according to SAA’s chief
restructuring officer, Peter
Davies, London Heathrow is
beginning to show signs of a
turnaround since the airline
cut the second daily flight.
According to Peter this flight
had been making losses of
US$50 000 (R708 870) per
day for the past 14 years.
Vuyani raised the issue
of the airline’s unprofitable
Hong Kong route, saying
it was SAA’s only gateway
into the Asian market and
therefore critical to brand
awareness. “Our presence
in that market is a tactical
one. We are continuously
evaluating options with
regard to this kind of
route, and we haven’t ruled
anything out.”
SAA – ‘route surgery’ over
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