WOLE SHADARE in this report, dissects South Africa’s turbulence amid plans to be profitable in three years
A new airline’s born
From Johannesburg, South African Airway’s hub, the national carrier of South Africa flies to over 35 destinations across Africa, the Middle East, Asia, Europe, Australia and North and South America. From its first flight in February 1934, the carrier has welcomed the world to South Africa by showing off the warm generous heart of the country.
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South African Airways (SAA), Africa’s oldest airline and formerly its most successful until recently. In truth, the government’s embarrassment is self-inflicted.
While other African countries have slowly liberated their national airlines from government control, SAA’s strategic direction remains constrained by political interference.
The South African government retains veto power over the airline’s purely commercial decisions, including its route network, fleet acquisition and, most significantly, payroll cuts.
Overall, the SAA’s experience serves as a warning to other African governments who still habitually interfere in the operation of their respective national airlines. Aviation is a truly delicate business, buffeted by numerous input factors outside airlines’ control, and unnecessarily adding to those unpredictable variables is a recipe for disaster.
Despite huge challenges, a clear-cut strategy to rescue the carrier is already underway by the new management led by its Chief Executive Officer, Vuyani Jarana, who said, “We now have a clear strategy and clear path to profitability defined by the board”.
Jarana, who became SAA’s first permanent CEO, said, “We are looking at a three-year window to get to a break-even point. We continue to revise the strategy as we see more opportunities.
“SAA will continue to cut or reduce loss-making routes and transfer unneeded planes to profitable low-cost carrier Mango Airlines.
“We have been operating in Nigeria for the past 20 years. We had our first flight in December 1988 into this country with few frequencies. We have graduated from four to seven frequencies and even we had a taste of Abuja Airport. We have operated several brands of aircraft into this country.
“We started with a Boeing 767 aircraft with different capacities and we moved to use a B747-400 and then to Airbus 340-600 and now we are using a brand new aircraft A330-300 with different capacity. In the last 20 years, we have airlifted over 3.5 million passengers”.
The company halved the number of flights from Johannesburg to London’s Heathrow last year and in 2017 cancelled or reduced the frequency of flights to African capitals including Luanda, Abuja and Kinshasa.
The airline has a fleet of more than 50 planes and flies to cities in 25 countries, according to its most recent annual report.
South Africa Airways began operations on February 1, 1934, when the South African government took over the assets and liabilities of Union Airways. The airline was renamed South African Airways (SAA), and fell under the control of the South African Railways and Harbour administration.
On November 1, 1934, SAA introduced Junkers Ju 52/3m, the first multi-engine aircraft, on its domestic routes. During the 30s, the airline steadily acquired more planes, including the first 10-seater Junkers Ju 86s, DC-3s, Constellation L-749As, Lockheed Lodestar, DC-7Bs Vickers Viscounts and the Boeing 707.
For over 80 years, the airline provided great air services around the world and became the pride of the country.
Amid challenges, since the carrier started operations in Nigeria on December 4, 1998 till date (20 years ago), has sustained its operations.
Investigations have shown that the Nigerian route is very important to the company, as it gives them good load factors and consistent services. They have the right mix of customers profile in terms of business class and economy class.
Jarana told journalists recently that the Nigerian route is one of the profitable routes that they have in SAA and the reason they want to continue to support, grow it and make sure they improve on customer experience on the route to be able to defend and retain their market position.
The carrier enjoys market leadership in Nigeria and this is the reason it is protecting it and making sure they listen more to customers and make sure that their partners continue to support them. The Nigerian route is one of the routes that they have consistently maintained and grown over the years by reacting adequately to what the market dictates.
Nigeria is among the top destination SAA fly on the continent and that explains its importance to them. Also, it is about consistency. Nigerian market is static and stable and Nigerian people are always supporting the carrier.
The airline had its first flight in December 1998 into this country with few frequencies. It graduated from four to seven frequencies and even had a taste of Abuja Airport. It operated several brands of aircraft into this country.
They started with a Boeing 767 aircraft with different capacities and moved to use a B747-400 and then to Airbus 340-600 and now they are using a brand new aircraft A330-300 with different capacity. In the last 20 years, they have airlifted over to 3.5 million passengers.