SAA seeks to allay shutdown fears

Visser

Visser

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https://www.fin24.com/Companies/Industrial/saa-seeks-to-allay-shutdown-fears-20181111

Cash-strapped national carrier South African Airways on Sunday assured customers and suppliers that it would not be “shut down or sold”.

The statement comes after the Minister of Finance, Tito Mboweni, recently suggested that shutting down the state-owned airline would be the best option.

In a statement SAA said it would like to “assure all its stakeholders, customers and suppliers of business continuity after government clarified its position that the airline will not be shut down or sold.”

The airline has been a recipient of numerous government guarantees.

Answering question in Parliament last week, President Cyril Ramaphosa, said SAA was “laden with debt” and the country “would not be able to get any value for it," if it was to be sold.

The airline said it welcomed Ramaphosa’s assurances that it would remain in business and that government was “considering various options, which include the possibility of an equity partner.”

“SAA’s strategy implementation is on track and there are ‘green shoots’ that indicate positive results on initiatives already implemented, particularly in the airline’s route network.”

The debt SAA carries is significant and underwritten by government. Treasury recently allocated R5bn to SAA to stabilise its debt, R14.2bn of which is due in March 2019.

Plans to turn around the flag carrier included the implementation of capacity adjustment in the domestic market and network optimization in the regional and international markets. Bloomberg, meanwhile, reported earlier in the week that SAA was considering selling shares to end years of losses and reduce the need for bailouts.
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I won't be surprised if some lenders started threatening to make all debt payable. I think the ANC is in a s**t storm with lenders.... this is going to get interesting.
 
No need to allay any fears... my heart pumps lumpy custard for this lot...
I'd smile and wave as they shut down... don't need them, don't want them. Tired of paying for their bailouts.
 
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Sell your assets to competent airliners and close business. We're ready for the hit on the economy because doing nothing costs us way more.
 
ponder said:
I don't think they have much in terms off assets to sell, aren't most of the planes leased?
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Don't they own most of the narrow body aircraft and the older wide bodies?
 
Keep them running please. I have a flight with them in December. Get the money from education or health if you have to.
 
Shutting SAA won't help, because SAA isn't the problem. It's the loopy policies of the ANC government that cause this: bad managers, inflated payroll, and so on - all imposed by the State. SAA's woes are an effect and a symptom of a much deeper problem, and if we don't fix that we'll just pay elsewhere, and bury what can be a perfectly good airline in the process, and much else besides.

Of course the prospect of changing the ANC's loopy and racist economic policies are rather low...
 
ForceFate said:
Don't they own most of the narrow body aircraft and the older wide bodies?
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Airbus A319 x 7 (all leased)
Airbus A320 x 10 (all leased)
Airbus A330-200 widebody x 6 (all leased)
Airbus A330-300 widebody x 5 (all leased)
Airbus A340-300 widebody x 7 (6 owned and 1 leased)
Airbus A340-600 widebody x 9 (6 owned and 3 leased)
Boeing 737-300 Freight x 3 (all leased)


They should get rid of the A340's that they own. Expensive to run and with avg age of 15 years per plane going to get expensive to maintain also.
 
Ockie said:
Airbus A319 x 7 (all leased)
Airbus A320 x 10 (all leased)
Airbus A330-200 widebody x 6 (all leased)
Airbus A330-300 widebody x 5 (all leased)
Airbus A340-300 widebody x 7 (6 owned and 1 leased)
Airbus A340-600 widebody x 9 (6 owned and 3 leased)
Boeing 737-300 Freight x 3 (all leased)


They should get rid of the A340's that they own. Expensive to run and with avg age of 15 years per plane going to get expensive to maintain also.
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Basically the aircraft they do own are worthless in the industry. It's like owning a 15 year old french car. Nobody wants it. They won't get much for them, if anything at all.
 
Ockie said:
They should get rid of the A340's that they own. Expensive to run and with avg age of 15 years per plane going to get expensive to maintain also.
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A340's are not worth much. Had a quick google and a newly white painted one with all certifications etc can be delivered for $9m if you want one.
 
ponder said:
A340's are not worth much. Had a quick google and a newly white painted one with all certifications etc can be delivered for $9m if you want one.
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Even so, they need to get rid of them. They are going to get harder and harder to run economically as the fuel price goes up and maintenance starts to bite.

They should ask Airbus to do a trade in deal lol. Trade all of them in for some A330Neo's or A350's. :laugh:

Hell, Boeing even bought some A340's from a airline not so long ago on condition they take a few Boeing's as replacements.
 
Ockie said:
Even so, they need to get rid of them. They are going to get harder and harder to run economically as the fuel price goes up and maintenance starts to bite.

They should ask Airbus to do a trade in deal lol. Trade all of them in for some A330Neo's or A350's. :laugh:

Hell, Boeing even bought some A340's from a airline not so long ago on condition they take a few Boeing's as replacements.
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The German airline is also asking the planemakers to help it get rid of its aging and fuel-hungry Airbus A340 models, the people said.


While Boeing and Airbus have on occasion taken back used jets to seal deals, they probably wouldn’t consider A340 trade-ins from just any potential buyer, said George Ferguson, an analyst with Bloomberg Intelligence. Demand and book values for the four-engine aircraft have dwindled as airlines shifted to flying more-efficient twin-engine models.
“It depends on the customer, the price people want on that asset,” Ferguson said. “If you have A340s, you’re pretty motivated to get them off the books in a way that makes it palatable to shareholders.”
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https://www.bloomberg.com/news/arti...d-to-give-boeing-a-shot-at-new-wide-body-deal
 
Ockie said:
Hell, Boeing even bought some A340's from a airline not so long ago on condition they take a few Boeing's as replacements.
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They took 1/2 from some chinese airline some time back in exchage for a 777 sale and airbus took the other 1/2
 
I can well understand the calls to shut down SAA simply to stop the haemorrhaging of taxpayers' billions. It's a blerry outrage.

But I also think the "shut it down" calls are short-sighted, premature, and even dangerously nihilistic.

Yes, the ANC regime has mismanaged SAA into a massive millstone around the SA taxpayer's neck, but it's not too late to try the one thing needed to return the company to viability: competent executives free to make all necessary organisational and structural changes to restore the airline to financial viability, without political interference. My sense is that probably 75-80% of its current headcount is underskilled, incompetent, or just plain useless. They need to go as quickly as possible, and where it makes sense, replaced with capable professionals. Colourlind.

To simply shut it down now would be to finally destroy what ANC mismanagement has so far not quite succeeded in doing: turning a once proud and internationally respected airline into dung.

It's worth pointing out that SAA has a long and proud tradition. It has had - and probably still has - some of the finest commercial aviators and professionals in the airline business, at least the equals of their peers elsewhere. It has for decades had proven technical excellence, and provided superb training to not only local professionals, but to many leading airlines worldwide. It once had one of the best-rated and most-sought-after simulator training centres anywhere, training more foreign pilots than locals. The list of superlatives is long.

So many superb professionals have poured their lives into SAA.

These are the people who are still doing the real actual work, keeping the ageing fleet in the air, flying, servicing, paying the bills, and managing the ten-thousand complex organisational and logistical processes and systems needed to get the planes going day in and day out. They are doing so because they care, and because they're consummate professionals despite the almost impossible incompetence of their state-imposed 'colleagues'.

These people are heroes. They keep flying despite the soul-sapping sludge of state-deployed incompetents.

It would be a grievous injustice if these outstanding and capable people were simply handed a letter and thrown on the ash-heap.

Fixing SAA will take many years. The damage is deep. But it hasn't passed the point of no return.

What has long passed its sell-by date is the corrupt ANC regime with its nationalist-racist-socialist policies. It's to our overlords that our ire should be directed. There is still time to liberate SAA from the shackles of a corrupt State, and keep what is not only good but very good.
 
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