Dire choices for ailing SAA

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Ockie

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SOUTH African Airways (SAA) must secure an equity injection from the state or apply for business rescue, and to continue trading under current circumstances is "reckless", a memorandum from the executive team to the board warns.

The memorandum also recommends that the board abandon its attempts to renegotiate the Airbus transaction to lease five A330 aircraft and revert to the old deal structure that was negotiated in March.

This would ease some of SAA’s financial distress as the airline is unable to pay both its debts as these come due and the predelivery payments required by Airbus.

Chairwoman Dudu Myeni has pushed for the renegotiation.

SAA is technically insolvent as its liabilities exceed the value of its assets and requires a government guarantee to be declared a going concern. Despite these distressed circumstances, the board recently sought to renegotiate its arrangement with Airbus, triggering substantial financial obligations. It is in response to this transaction that the executive committee decided to draft the memo...............................
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http://www.bdlive.co.za/business/transport/2015/11/24/dire-choices-for-ailing-saa
 
fsuck SAA and it's incompetent management team, Sell it off for whatever they can, enough is enough
 
HunterGR said:
fsuck SAA and it's incompetent management team, Sell it off for whatever they can, enough is enough
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Agreed. I think the only thing worth keeping is SAA technical and Mango. Sell the rest of the airline to who ever likes living on the edge and take on a massive risk and challenge.
 
Correct me if I am wrong but is it not compulsory to have a national airline for your country?

Like the post office that you cant just close down due to treaties and what not.
 
Acid0 said:
Correct me if I am wrong but is it not compulsory to have a national airline for your country?

Like the post office that you cant just close down due to treaties and what not.
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Is this according to the ANC handbook called "how to excel in corruption and screwing things up"?
 
Acid0 said:
Correct me if I am wrong but is it not compulsory to have a national airline for your country?

Like the post office that you cant just close down due to treaties and what not.
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Where on earth did you hear that? Many countries in Africa dont have one. Besides, you can have a flag carrier, not national airline, but it is in private hands. British Airways is one such airline.
 
Privatize, lean it out, and hopefully break even.

TBH SA isn't in the best position geographically speaking, we're at the bottom of a continent with lots of sea on both sides, the best I think SAA can do is regional routes and ferries to major hubs such as Dubai and Heathrow, if they can get their code share agreements sorted.
 
Segg said:
Privatize, lean it out, and hopefully break even.

TBH SA isn't in the best position geographically speaking, we're at the bottom of a continent with lots of sea on both sides, the best I think SAA can do is regional routes and ferries to major hubs such as Dubai and Heathrow, if they can get their code share agreements sorted.
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Perhaps look at the Air New Zealand model and see how they are doing it. I do think they have the right idea of creating a hub somewhere in the middle of Africa. Johannesburg and Cape Town would then be a spike route out of that hub. Similar to what Emirates have done, except their home base is the hub.
 
Ockie said:
Perhaps look at the Air New Zealand model and see how they are doing it. I do think they have the right idea of creating a hub somewhere in the middle of Africa. Johannesburg and Cape Town would then be a spike route out of that hub. Similar to what Emirates have done, except their home base is the hub.
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But let's be honest, a big part of Emirates success is its location is pretty much smack bang central to almost every other country in the world, the cheap fuel is just a convenience :P

Think of it this way, a passenger would rather fly from Singapore through Dubai to Amsterdam, rather than from Singapore through Johannesburg to Amsterdam, in most cases because it's more direct, even if SAA were significantly cheaper (which it can't be) I doubt this would sway passengers enough.

Doesn't Ethiopian have a foreign hub these days somewhere in West Africa?
 
Segg said:
But let's be honest, a big part of Emirates success is its location is pretty much smack bang central to almost every other country in the world, the cheap fuel is just a convenience :P

Think of it this way, a passenger would rather fly from Singapore through Dubai to Amsterdam, rather than from Singapore through Johannesburg to Amsterdam, in most cases because it's more direct, even if SAA were significantly cheaper (which it can't be) I doubt this would sway passengers enough.

Doesn't Ethiopian have a foreign hub these days somewhere in West Africa?
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Yes, I agree, and that is what a West Africa hub could help achieve.

No, Ethiopian does not have a hub in West Africa as far as I know. They do have a partner there with one of the airlines, but it is so small it is of no significance really I think. Ethiopia is already placed in a good spot to become a very big hub, and the growth Ethiopian is showing is proof of that. They are not the cheapest though compared to he ME juggernauts.
 
The link changed to this

On Tuesday morning we received an interim High Court Order instructing us not to publish a story premised on an internal memo from the head of legal, risk and compliance at SAA, Ursula Fikeni, to the board of the airline. The order was e-mailed to the story’s author, Carol Paton, at 1.47am.

The order includes the print edition but since we print our first edition at 9.30pm and the second edition at 10.30pm it was not possible to comply with the order, so the print edition is on the retail shelves. Neither SAA nor its attorneys, considering the lateness of the hour, attempted to notify the Business Day telephonically of their intentions.

While we have taken the story down from this website it is our intention to approach the High Court as soon as possible to have the interim order, which we were not able to defend when the application was made, set aside. In SAA’s court papers, which we have now seen, the airline argues that the memo in question is “privileged” and should therefore not be published. We believe this argument is unfounded and is contradicted by case law.

SAA is a public institution that continues to receive billions of rand in taxpayer bail-outs. It is ludicrous to suggest, as they do, that the public is not entitled to know the real state of the organisation. In February the National Treasury’s Budget Review described SAA as being “technically insolvent”. What happens next is of enormous public interest.

We at the Business Day shall continue to pursue the SAA story so that the public can form informed opinions about this public entity.
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Sorry for posting the entire content but the link is technically not valid anymore.

Interesting tactic from SAA though, and even more interesting retort from Business Day.
 
VernD said:
Sorry for posting the entire content but the link is technically not valid anymore.

Interesting tactic from SAA though, and even more interesting retort from Business Day.
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Lol

Well done to Ockie for getting the content before it was taken down :D

I was wondering why the original link was 404
 
Segg said:
Privatize, lean it out, and hopefully break even.

TBH SA isn't in the best position geographically speaking, we're at the bottom of a continent with lots of sea on both sides, the best I think SAA can do is regional routes and ferries to major hubs such as Dubai and Heathrow, if they can get their code share agreements sorted.
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Correct.

There are a few other reasons why SAA got the short end of the stick.

-SAA flies non profitable / low profit routes for the greater good of the country / southern Africa. I.e. George.
-Bad timing / got unlucky with the A340's and fuel price / ETOPS. They need to replace them asap.
-BEE
-Political interference hindering management. No one competent is employed long enough before getting the golden handshake. So yes. Another ANC success.
 
Fire the board and the management team. Appoint people that know how to run a business. Get the cANCer out off there.
 
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