In April 2019, long before SAA went into business rescue, Travel News (then TNW) published an opinion piece from an aviation industry expert, who suggested these steps to save SAA. Here is an excerpt…
21 February 2019
OPINION
SAA should go virtual
I have been in the aviation business for several decades and have sat by as SAA has headed to oblivion. One rescue plan follows the other, without any success. SAA is stubborn and will only listen to the expensive consultants who bring them nothing but more pain.
Too many free flights, free upgrades, free this and free that have become the norm. The airline has been a toy for government officials, their families and their buddies.
The staff at SAA are mere bystanders. At some point they will lose their jobs. But the airline can be saved and some of the jobs, too. It will be a tough choice, not a pleasant one, but a necessary one. You cannot be a commercial entity and still provide jobs to save votes for the ruling party.
There are not many options left for SAA, but if it keeps on doing the same thing over and over, it will see the same results. But if the powers that be think out of the box and tackle the problems, there will be pain, but more importantly, there will be long-term gain.
The remedy will be hard to swallow and very painful but, in my view, necessary. SAA should create a virtual airline, selling seats only. SAA has the infrastructure, and should use it effectively and drop the expensive (outdated) hardware.
5 things SAA must do
1. Lease, sell or mothball the aircraft
Place most of the SAA fleet on semi-retirement, lease them out, sell them off as scrap or park them. Park the hardware in the hangars and keep them under wraps for 3-5 years. No flying, but just keep doing the minimum maintenance for the ones that are kept. Keep the windfall from the aircraft sold. Keep and rent out the popular routes (PLEASE do not sell them!!).
2. Place crew on special leave or retirement
Place the best crew with airlines on special assignment, especially with the airlines that are mentioned below.Retire some crew and keep the minimum on the payroll. This is now a virtual airline. Use them mainly for your domestic operations.
3. Agree alignments/codeshares
Resign from the Star Alliance, as they are keeping you back. Make arrangements with the following airlines or hubs:
- Dubai (Emirates)
- Addis Ababa (Ethiopian)
- Frankfurt or Amsterdam (Lufthansa or KLM/Air France) the latter my choice as you will have two airline options
- São Paulo (Latam)
- Hong Kong (Cathay Pacific)
- Atlanta (Delta Air Lines)
Allow these airlines additional flights on the respective routes and demand 50% of the seats in return for pulling the SAA flights. Get crew on to these airlines to serve the SAA customer and look after the SA interest, ie ‘Uber’ the crew.
Ensure that SAA has seats on each of the other destinations beyond the hubs (trade-off for more frequencies) and then sell those networks as if they are your own. Between these airlines you will have a network second to none! SAA has taken the first step with such a deal with Emirates.
You could be flying passengers to New York through six different hubs/options/flights and you could potentially have more capacity on the JNB-JFK route than any of them combined.
Africa is a great strength, but you have airlines that are far better than you. Get out of their way, give them space to operate. The taxpayer is gatvol, just do it!
4. Grow the revenue and create a war chest
Make sure that the revenue received (from reduced costs, like the fuel and staff bills which are the biggest cost tickets) is used to cover taxpayers’ shortfall.
Once the airline has erased the debt to taxpayers, it can then create savings of a similar amount before it decides to come back on the routes, that is if it still has the appetite to fly its own hardware.
Focus on the domestic routes, consolidate the three brands into one, as you have been contemplating for more than five years – get on with it! This is your only hope of survival.
5. Learn from the professionals
Take this opportunity for SAA crew and other staff to learn from these airlines. Let them go on courses with these carriers and train with them. That professional attitude and behaviour may just stick, and SAA could just get the airline back on track.
This anonymous opinion is that of a former senior airline executive with strong experience in SA and other international airlines. Travel News is aware of their identity.
