SAA back in profit?!

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  • openfly

    Most of the foreign operators at SA airports use SAA Engineering to cover their arrivals and departures and to rectify problems..including BA. If these guys also come out on strike it could have serious implications for these operators.


    Friday Briefing: Crash and burn – The end of SAA?

    shared via @News24


    Psssst …. want to buy a jet engine … it fell off the back of an lorry Airbus.

    Tito Mboweni told them that massive aircraft equipment had been disappearing from SAAT – a subsidiary of SAA – which has been set up to service aircraft.

    “I was told a story by the CEO of SAA [Zuks Ramasia] which boggles the mind. She says a whole spare engine disappeared from SAA Technical. This big thing, how did it leave the airport? It boggles the mind … This is stuff of the movies, man,” Mboweni said.

    “An aircraft part was lost for ideological reasons’. The ideology of what? The ideology of theft under the guise of Marxism,”Mboweni said, before being called to order by MPs.

    Auditor General Kimi Makwetu slapped state-owned airline SA Express with a disclaimer audit opinion in the airline’s annual report and financial statements for the financial year ended March 2019.

    In auditing terms, a disclaimer audit opinion occurs when an auditee is unable to provide evidence of its financial state as reflected in the financial statements. After a number of delays preventing it from doing so, SA Express submitted its annual report in Parliament earlier this week.

    SA Express reported a net loss of R590m in the financial year ended in March 2019 and a net current liability position of R374m. The net cash from operating activities deteriorated to negative R461m from R101m reported in 2018.

    In the audit report on SA Express’ financial statements, Makwetu said there was not sufficient evidence in the contents of the financial statements to conclude that the airline could continue as a going concern.


    It appears as though the current strike actions have been resolved, though I’m sure SAA’s larger woes are far from over…



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    SAA suspends Hong Kong route until mid-December.

    I suspect one of the reasons (besides the current unrest in Hong Kong) are the indirect carriers who must be putting pressure on yields/

    It’s not just the Gulfies as Ethiopian now becoming a a more powerful sixth-freedom carrier.

    South African Airways suspends Hong Kong route


    28 November 2019 8:27 AM

    Scopa chair Mkhuleko Hlengwa says the parliamentary public accounts committee has not seen the airline’s financials in 3 years.

    South African Airways (SAA) has failed to submit the 2017/18 and 2018/19 financial statements to Parliament yet again.

    The airline was expected to explain to Parliament’s Standing Committee on Public Accounts (Scopa) why it has failed to submit financials for the past two years.

    Speaking to Refilwe Moloto, Scopa chairperson Mkhuleko Hlengwa says as the committee they are concerned about SAA’s behaviour.

    RELATED: SAA management pulls out of Scopa meeting

    As Scopa we are concerned about the financial management at SAA but we are unable to zoom in into that financial management if we do not have sight of the financials.
    Mkhuleko Hlengwa, Chairperson – SCOPA

    We have not received those financials for two years going to three years.
    Mkhuleko Hlengwa, Chairperson – SCOPA

    He explains the resolution the committee has taken in regard to the airline.

    The committee resolved that we have to receive that information by Tuesday so SAA has to make those submissions by Tuesday.
    Mkhuleko Hlengwa, Chairperson – SCOPA

    The committee has also decided that it will go to Johannesburg next week Thursday so we can put boots on the ground.
    Mkhuleko Hlengwa, Chairperson – SCOPA

    Hlengwa says they cannot short circuit the accountability of SAA.

    I am calling on SAA to look at the bigger picture because if you isolate Parliament you actually isolating yourself.
    Mkhuleko Hlengwa, Chairperson – SCOPA

    SAA would not be in this mess and they would not be holding us to ransom if they did the right thing in the first place and deal with their finances from the start.
    Mkhuleko Hlengwa, Chairperson – SCOPA


    Just a matter of time surely?


    You would think so, but it has been ‘just a matter of time’ for years, and it has been ‘just a matter of time’ for the whole country to blow up since 1948! South Africans seem to be remarkably enduring and resilient.


    No comment required :

    At midday today Flight Centre Travel Group (FCTG) informed its customers and SAA of their decision to issue an immediate stop-sell on SAA tickets.

    This follows Travel Insurance Consultant’s (TIC) announcement yesterday that it had excluded SAA from its Travel Supplier Insolvency benefit.

    “This is the first time that we have had to issue a stop-sell on the national carrier. Following mixed messages from the government about whether the airline will be bailed out and the decision from insurance companies to exclude SAA from their insolvency cover, we have had to make an immediate move to mitigate the risk to ourselves and our clients,” says FCTG’s md for Middle East and Africa, Andrew Stark.


    I do wonder what SAA’s game is.
    I’ve just looked at flights LON-CPT within the range 10-16DEC outbound and 27DEC-02JAN for a friend who’s decided to book a last minute trip.

    Cheapest Y on BA £637 (1 stop on the way out) or £894 nonstop.
    Cheapest Y on SA £1502 and that’s connecting in JNB in each direction.

    BA’s cheapest premium economy is less than SAA’s cheapest economy.

    If SAA’s flights were full and they could afford to charge premium fares, I could understand this. BA’s aren’t full either but they have a much higher booked load factor.

    SAA might be keeping seats free for the ANC boys and girls who want free rides over Christmas.
    SAA might no longer be flying by Christmas!


    This is the man who should be running SAA.

    I think we can guess why he isn’t.

    Mango is proof that a state-owned airline can be productive, profitable – CEO Nico Bezuidenhout
    Dec 03 2019 08:38 Carin Smith

    State-owned low-cost airline Mango recently celebrated its 13th birthday. It is 100% owned by struggling flag carrier South African Airways, but operates independently with its own board and balance sheet.

    CEO Nico Bezuidenhout, who was at the helm of the the low-cost carrier from its start until 2016, and again as from October this year, told Fin24 that Mango doesn’t have recourse to bailouts and public funding.

    It has transported 29 million passengers and created jobs for more than 800 people, he says.

    “All our employees know that our future depends on the commercial viability of Mango. That is what drives the culture we created. We don’t have recourse to bailouts and public funding. It is a team effort. We don’t have a hierarchy with management in an ivory tower. We also don’t have silos,” he says.

    “When SAA employees were on strike recently, I was so proud of Mango. We got every passenger to their destination and even improved our on-time rate. Mango employees refused to join in a sympathy strike as they know it would impact their livelihood. We have had no restructuring at Mango.”

    Bezuidenhout says Mango has paid a total of R4.8bn in airport taxes and VAT, R3bn in airport fees and more than R4bn in maintenance costs.

    “With Mango we set out to improve affordability in SA aviation. Also, Mango does not only carry passengers around, but also stimulates economic activity in SA, which is what it is meant to do,” says Bezuidenhout.

    He was given R100m to start Mango and his mandate was clear: if you lose this money, you are done for.

    Since his return as CEO in early October, a process has started of probing the supply chain, engaging with suppliers and looking at cost efficiency to try and achieve cost reductions of between 10% to 30%, he says. This process is expected to have been completed by December 15.

    Over the past 18 months, ahead of his return, the airline took on four additional aircraft. But SAA Technical (SAAT) was “a sub-optimal maintenance provider”, according to Bezuidenhout. This led to a situation where up to 10 of Mango’s 14 aircraft were non-operational at certain times.

    READ: SAA enters danger zone as companies start withdrawing business

    Over the last six weeks, however, Mango has mostly been fully operational. According to Bezuidenhout, the airline has increased its oversight at SAAT which has helped with its on-time performance and improved maintenance planning.

    “If aircraft are not in the sky, an airline cannot make money. It must also have the correct routes to be profitable. Of course, there has been ups and downs at Mango. The business has, over last two years, not been profitable and experienced some tough times,” he said.

    Bezuidenhout says he cannot disclose any financial information, as this will have to be released as part of SAA’s group results, which have recently once again been delayed.

    Asked about the low-cost airline industry in SA, Bezuidenhout says it has always been a volatile sector, highly traded and over-supplied. Currently, Mango, and Safair have about 60% of the domestic market, he says.

    “It is all about price and reliability. Carriers that deliver on that will win at the end of the day,” he says. “An airline can be state-owned and be sustainable. Mango has shown that in the past. We reduced the cost of air travel and made it more affordable so that more South Africans can fly.”

    For him a key measure to look at is not the number of employees an airline has in relation to its number of aircraft, but rather the number of employees in relation to the number of passengers an airline has flown.

    For Mango that is 5 500 passengers per employee per year, which, according to Bezuidenhout, compares well to that ratio at other local airlines, both state-owned and private.

    “Our ratio shows me that the Mango employees are productive. It is all about efficiency and productivity of an airline’s assets, people and supply chain. If an airline is more reliable, innovate and communicate well with its passenger base, it has the ingredients for a sustainable business,” concludes Bezuidenhout.

    SAA in “intense discussions” with lenders

    While Mango employees kept working during last month’s SAA strike, the week-long industrial action by members of the National Union of Metalworkers of SA and the SA Cabin Crew Association “caused immense damage to the reputation, operations, and the deterioration of the finances of SAA, according to Minister of Public Enterprises Pravin Gordhan.

    Gordhan, in a statement released on Sunday evening, said the national flag carrier was in “intense discussions” with lenders to secure much-needed funding and will go through a “radical restructuring process” to ensure its financial and operational sustainability.

    The strike, which SAA says cost R50m per day, ended on November 22.


    So the acting CEO has been placed on “special leave”.

    Mark Barnes should expect a call. SAA needs a rare bird.

    And despite all the bluster by Cyril and the boys another R4bn of taxpayers cash is on the way.

    SAA gets R4bn life support as business rescue initiated


    A justification from the president for wasting a further 4 Billion R ?
    How long will it last one wonders – a day,a week perhaps even a month? Methinks not much more than that.
    What then?
    Perhaps praying for a miracle would be the best option !

    JOHANNESBURG (Reuters) – South African Airways had to be placed on “business rescue” because there was no other viable and financially workable option for a credible future for the state-owned airline, President Cyril Ramaphosa said on Monday.

    The airline was placed on business rescue by the government, a form of bankruptcy protection, on Thursday in hopes to save the cash-strapped state carrier from collapse.

    “The financial crisis had become so grave that the only way to secure its survival was to take this extraordinary measure,” Ramaphosa said in his weekly newsletter.

    Reporting by Nqobile Dludla; Editing by Tom Hogue

    Our Standards:The Thomson Reuters Trust Principles.

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