Hilka Birns/CAPE TOWN
South African Airways (SAA) chief executive Coleman Andrews has urged Pretoria to cut jet fuel prices and use regulatory powers to defend SAA on international routes while it reorganises its fleet and network.
Andrews told a parliamentary committee that SAA could save up to R80 million ($12.6 million) in the remainder of the current fiscal year if the government removes levies and taxes and sells jet fuel at market related prices. SAA reported a R240 million loss for the period ending March 1998, but expects improved performance in the second half of the current fiscal year.
Andrews has also called for the lifting of a ban on the carriage of passengers on the domestic sectors of long-haul routes such as the Cape Town-Johannesburg leg of a Cape Town-London flight. He says that this would allow the airline to redeploy some of its narrowbody aircraft on to regional flights within southern Africa. "This ban costs SAA about R100 million a year," he says. Andrews says that the government, as SAA owner, is obliged to help the carrier and lift the ban.
The restriction was placed on SAA following a spate of smuggling operations which took advantage of customs and immigration loopholes which arose because of the combined local and international multisector flights.
As part of its reorganisation, SAA has cut its flights to Dubai, preferring a daily code-share with Emirates Airlines. Airline sources also suggest that the carrier is considering cutting its ties with Thai Airways and realigning with Malaysia Airlines in a move that would see SAA's Asian hub shift from Bangkok to Kuala Lumpur.
A draft opening balance sheet and revised business plan has been prepared for SAA, but at press time, these had not been presented to Transnet (SAA's parent) or the government. The airline says that the business plan defines a broad strategy and does not recommend specific aircraft types.
SAA has taken delivery of its first two of up to six Boeing 727 freighters on lease for domestic and regional cargo operations in collaboration with DHL. Earlier this year SAA Cargo and DHL established Safron Services, a joint venture to provide air courier services throughout southern Africa using Johannesburg as a hub.
The timing of the lease has raised eyebrows locally, as it adds an extra type to the airline's fleet at a time when its new management has proposed streamlining. It also coincides with the government's appointment of a task group to formulate an aircraft noise and engine emission policy to make South Africa compliant with the policies of the International Civil Aviation Organisation and international environmental bodies.
Source: Flight International
