Forbes Mutch/JOHANNESBURG
DELAYS BY South African Airways (SAA) in confirming its engine selection for seven Boeing 777s ordered in December 1995 have set back the airline's expansion plans and could increase the cost of the order by 20%
Boeing says that reluctance by the airline to finalise its choice of powerplant has meant that the first two production slots have now been forfeited, pushing back first deliveries from July 1997 to November at the earliest.
The delay will not only cost SAA more in cash terms, as the rand continues to be devalued against the US dollar, but will affect revenue on routes to Europe, the Middle East and the USA, where SAA needs the aircraft urgently, to boost services on its most heavily subscribed destinations.
The rand has already fallen by 17% against the dollar since mid-February. In addition, the unit purchase price of each aircraft was not fixed in the deal, and is likely to rise before deliveries begin.
The delay in finalising the R1 billion ($ 240 million) deal for 22 engines is believed to be due to the intervention of the South African Government, which is insisting on a greater percentage of offset work from the engine manufacturer selected. SAA was to have made an engine selection in October 1995.
The front runner in the competition to supply a 422kN (95,000lb)-thrust engine is believed to be Rolls-Royce, offering its Trent 800, although Pratt & Whitney, offering its PW4084, and General Electric, with the GE90, remain optimistic should there be a late decision-change.
All three manufacturers are understood to have offered offsets of around R110 million.
Source: Flight International
