HILKA BIRNS / CAPE TOWN
Following rejection of privatisation offer, Malawi government advised to get strategic recovery plan under way
The privatisation of ailing flag carrier Air Malawi has been delayed after the Malawi government rejected a South African Airways (SAA)-supported bid. A strategic recovery plan now looks likely to get the privatisation back on course.
The offer was made by Malawi empowerment company Crown Aviation, which was promised technical support from SAA, such as aircraft leases and servicing. According to Malawi's privatisation committee, the deal fell through because the bidder would not pay a $250,000 bond as security. The committee recommended the Malawi government devise a strategic plan for financial recovery so that privatisation of the airline, which operates one ATR 42 and one Boeing 737-300, could continue at a later stage.
SAA executive vice-president and chief financial officer Richard Forson says the airline had not pursued a stake in Air Malawi. "We had an interest to support Air Malawi, but it is more crucial for us to make Air Tanzania [in which SAA owns 49%] work."
Meanwhile, SAA chief executive André Viljoen says the airline has accumulated a further R100 million ($13.3 million) in profits in the past month, and profits for the year now exceed R500 million. He says costs have been reduced by R1 billion through efficiency improvements in the fiscal year ending March 2003, and revenue has increased by 19.5%. "The Iraqi war and SARS have had little impact on our overall network," he adds.
With business remaining strong, Viljoen has asked SAA's board to approve the acceleration of deliveries of two Airbus A340-600s from 2005/6 to next February, for use on non-stop flights to Atlanta and New York. Non-stop services to Shanghai, Sydney and Tokyo are also planned, and Viljoen says talks are being held with Airbus about the proposed longer-range, increased-weight version of the A340-600, for which Emirates has commitments.
Viljoen says the higher-weight -600 version would enable direct flights to be operated from Johannesburg without a payload penalty, and is favoured over the smaller A340-500. SAA has held preliminary talks about taking two A340-500s originally built for Air Canada. The Airbus A380 is also being evaluated to operate London, Frankfurt and Paris services from 2006/7.
Source: Flight International
