SAA back in profit?!

Back to Forum

This topic contains 47 replies, has 7 voices, and was last updated by  capetonianm 16 Nov 2019
at 10:02
.

Viewing 15 posts - 16 through 30 (of 48 total)

  • SimonS1
    Participant

    I read on one newswire today that 11 ANC former ministers have resigned from parliament since the recent election, mainly those Zuma cronies passed over for office by Ramaphosa.

    Each of these ex ministers is allowed 48 single business class domestic airline tickets a year, plus 24 for their spouses/partners. For ever.

    Assuming no other airline would carry these losers around without payment in advance that is a high burden for SAA….who knows if they get reimbursed and when.


    capetonianm
    Participant

    Those free tickets are small fry compared to the abuse, pilferage, and backhanders in other areas.

    Not to mention senior overseas postings for ANC boys and girls who know as much about airline management as I do about nuclear isotopes.

    1 user thanked author for this post.

    capetonianm
    Participant

    SAA to lease 2 x A350s :

    Someone must have got a nice backhander.
    I am cynical as to whether or not they will finalise this lease, the information is a bit sketchy.
    It needs more than this to return SAA to profit.

    According to another source :

    The initial lease period is for three years. They say that the two aircraft in question are B-304Z and B-305A and that they were originally destined for HNA. There were reports in 2018 that the Chinese Government were dragging their heels on regulatory approval for the A350.

    HNA have two different types of business class cabins in their A350s. One type (30 seats in a 2-2-2 reverse herringbone configuration) they prefer to use in their own domestic market. The other (33 seats in a 1-2-1 configuration) they dispatch on international sectors – although this is not a hard and fast rule.

    State-owned national flag carrier South African Airways (SAA) announced on Sunday that it had leased latest-generation Airbus A350-900 aircraft to operate its Johannesburg-New York route. The new, twin-engined, aircraft will replace the four-engined older generation Airbus A340-600 airliners currently used on the route.

    The wording of the statement implied more than one A350 was being leased (more than one would be needed to ensure constant operation of the route), but SAA did not specify the number it was getting. The lease period is for up to three years.

    “The introduction of these state-or-the-art aircraft to our fleet is an important step-change as we continue to make progress to transform our business and return the airline to financial sustainability in the shortest time possible,” affirmed acting SAA CEO Zukisa Ramasia. “These aircraft present an immediate opportunity to offer an improved product between Johannesburg and New York which will be accompanied by unmatched and consistent customer experience for both Business and Economy Class customers.”

    SAA’s A350s will be delivered during this, second, half of the year. They will be fitted with lie-flat beds in Business Class and have 246 seats in Economy Class. The first six rows of Economy Class will have extra legroom.

    The new aircraft will cut the airline’s fuel expenditure by about 20%, in comparison to the A340s currently used on the route. The result will be significant cost-savings for SAA and so help improve its operating costs and financial situation. The airline’s carbon emissions will also be reduced.

    “The Airbus A350-900 is the world’s premier aircraft and offers the highest levels of customer and crew comfort combined with excellent economics for ultra-long-haul flights,” enthused SAA in its press release. “The A350 has the latest offering in safety, maintenance and efficiency (technology).”

    “We are proud to offer our customers the latest generation aircraft with a modern product, including quieter cabin, a more relaxing environment during flight, and the latest in-flight entertainment.” said Ramasia. The Johannesburg-New York will continue to be a non-stop flight


    SimonS1
    Participant

    How is Tony Gupta these days?


    cwoodward
    Participant

    There is no regulatory issues or restriction on the A350 operating in China with most of major lines operating the aircraft.
    The problem for the HNA group leasor is that due to HNA groups financial woes they have at least 8 A350 aircraft ‘in stock’ with more in production. At least 6 of these were destined for Hong Kong Airlines and have been sitting in Toulouse for up to 9 months.
    We can expect I suspect to see more ‘interesting’ lessors of the A350 following Fiji and SAA as clearly the owner needs to move the stock along at one assumes is at very attractive pricing.


    capetonianm
    Participant

    Some good news at least for Mango.

    It’s a great shame he doesn’t match the demographic to take charge at SAA.

    LONDON—African LCC fastjet CEO Nico Bezuidenhout will leave the company at the end of September after three years to rejoin South African LCC Mango Airlines to lead its turnaround program. Johannesburg-headquartered fastjet has operations in Zimbabwe, Mozambique and South Africa. Mango Airlines, a subsidiary of South African Airlines (SAA), confirmed the move July 2. Bezuidenhout was Mango CEO for 10 years and will return to that position, which he held prior to departing for fastjet ..


    capetonianm
    Participant

    SAA board chair resigns

    https://www.fin24.com/Economy/saa-board-chair-resigns-20190711?

    The airline must really be in trouble when people at the top are distancing themselves before the coming collapse.


    SimonS1
    Participant

    SAA board chair resigns

    https://www.fin24.com/Economy/saa-board-chair-resigns-20190711?

    The airline must really be in trouble when people at the top are distancing themselves before the coming collapse.

    Shame, he was one of the few successful businessmen around. Probably thought it would be a bit less stressful to stick to running his own business.

    Opens up the door for some political appointee/clown to finish the job off though and put SAA out of it’s misery. Sell off Mango and the few successful routes.


    capetonianm
    Participant

    More taxpayers’ money has been flung into the bottomless black hole.

    South African Airways will receive additional state funding after Chief Executive Officer Vuyani Jarana resigned over what he said was a lack of government support for the loss-making carrier.

    Finance Minister Tito Mboweni included the country’s flagship airline on a list of companies that will get support from the country’s contingency reserve account. Power utility Eskom, the SABC and weapons maker Denel were also identified as in need of aid.

    “I must emphasize that this additional government support cannot be a blank check to these state-owned enterprises,” Mboweni said on Thursday. “We really and truly cannot go on like this.”

    SAA needs a clear government commitment of support for lenders to deal with the company, Jarana said in his resignation letter released early last month. The airline went unmentioned in both President Cyril Ramaphosa’s state-of-the-nation address last month and Finance Minister Tito Mboweni’s budget in February, raising concerns about how it will handle R9.2bn of debt set to mature later this year. A R3.5bn bridge facility was expected to run out at the end of June.

    Chairman JB Magwaza quit the struggling state-owned airline on Monday, according to Adrian Lackay, a spokesman for Public Enterprises Minister Pravin Gordhan. He didn’t give a specific reason for the chairman’s decision.

    The departure of Magwaza and Jarana exacerbates the leadership vacuum at South African state companies, many of which are in financial distress and in need of a radical overhaul. Eskom, SAA and ports and rail operator Transnet are all run by interim CEOs, with few obvious replacement candidates.


    SimonS1
    Participant

    As only 6% of South Africans are registered for tax, and 2.5% of South Africans pay over 90% of the taxes, I guess a bucket collection will soon reach your door.


    capetonianm
    Participant

    One of the narrowest and most inequitable tax bases in the world.


    SimonS1
    Participant

    Shock horror. It has been announced in today’s budget that the muppets will be restricted to economy travel of domestic trips!!

    Let’s see how this sticks. Or maybe the chaps will be on here seeking advice on how to get from Johannesburg to Cape Town via an international stop.


    capetonianm
    Participant

    Good old taxpayer coughs up again to support this farce of an airline.

    Type: news-article
    SAA
    Today, 02:14 PMPublished Date: Today, 02:14 PM Lameez OmarjeeAuthor: Lameez Omarjee

    Government will help struggling national carrier South African Airways (SAA) repay its R9.2bn in government-guaranteed debt over the next three years, Minister of Finance Tito Mboweni announced on Wednesday when he tabled his second mini budget.

    “In its current configuration, SAA is unlikely to generate sufficient cash flow to sustain operations,” states the mini budget document. “It is unable to repay outstanding government guaranteed debt of R9.2bn. Government will repay this debt over the next three years to honour its contractual obligation.”

    Subscribe to Fin24’s newsletter here
    Treasury said operational changes were urgently needed at the struggling flagship carrier, and Mboweni did not mince his words in his budget address.

    “We have essentially chosen to subsidise the middle class and wealthy flying around the country and other parts of the world, rather than the ordinary workers who sit in old trains from the townships every day, often getting stuck and being late for work,” he said.

    “We are also subsidising the wealthy bond holders, who hold government-guaranteed debt but receive higher yields without additional risk.”

    The minister also confirmed that the carrier is in discussions with potential equity partners to “liberate the fiscus from this SAA sword of Damocles”, though he did not provide any further information.

    Treasury has already transferred R5.5bn to the airline in the current year – part of the R37bn support package to struggling state-owned entities. The funds were to enable the carrier to extend maturities on outstanding debt obligations and give it time to develop an affordable repayment plan with creditors, according to the policy document.

    SAA requires R21.7bn to support its turnaround plan, Fin24 previously reported. R5bn recapitalisation was approved for 2018/19, and a further R5.5bn approved for 2019/20.

    Without a debt repayment plan supported by government, the airline’s lenders are unlikely to extend more loans to SAA beyond the end of the fiscal year. “If this happens, government is contractually required to step in and repay its debt.”

    Over R28bn in cumulative losses

    Treasury’s document notes that over the past 13 years, SAA’s cumulative losses amounted to over R28bn.

    The airline’s financial position is so dire that it failed to finalise its financial statements for the 2018/19 year on time. Subsequently the auditor-general could not complete its audit assessment of the airline, Fin24 previously reported.

    Public Enterprises Minister Pravin Gordhan told Parliament that the financial statements would be tabled as soon as the going concern challenges are resolved.


    LuganoPirate
    Participant

    Oh dear! And still they increase their fares making the main competitor domestically, Kulula / Comair more attractive, and the reason they have full planes and SA Express half empty ones!


    capetonianm
    Participant

    https://www.businesslive.co.za/bd/opinion/2019-10-30-a-new-airline-could-fly-past-saas-many-dead-ends/

    A new airline could fly past SAA’s many dead ends
    Merging three lame ducks will not miraculously create a swan, but spinning off a carrier with a commercial incentive could

Viewing 15 posts - 16 through 30 (of 48 total)
You must be logged in to reply to this topic.
BT November cover
BT November cover
Be up-to-date
Magazine Subscription
To see our latest subscription offers for Business Traveller editions worldwide, click on the Subscribe & Save link below
Polls