Widely accepted guidelines for the privatisation of South African Airways (SAA) have been turned on their head by chief executive Coleman Andrews.
The South African Government had said that it would sell off 49% of SAA, with 30-35% going to a single foreign partner and the balance finding its way to the National Empowerment Fund and staff. The remaining 51% of the airline was to be sold off within five years with the foreign equity partner probably gaining control.
Andrews, however, says these parameters are not cast in stone and that there is nothing stopping the airline taking on two foreign equity partners from opposing alliances. He adds that the partners will not necessarily acquire between 30% and 35% of the carrier.
These statements cast some light on SAA's signed bilateral memoranda of understanding with Swissair and Singapore Airlines (SIA), which come on the heels of a longstanding codeshare deal with Lufthansa, and could improve the value of the airline substantially before privatisation early next year. Andrews says SAA's options are open to the bids that suit it most. "Besides our new agreements with SIA and Swissair, we are negotiating on a fast track similar relationships in North America, South America, the Middle East and the UK."
The enhanced cooperation between SAA and its new partners will include reciprocal wet-leasing of aircraft, hull and engine maintenance, the full integration of cargo networks, common frequent flier benefits and management and cabin crew training.
The deals will also see the replacement of about nine of SAA's ageing Boeing 747SPs and 747-200s. One option could be a one-for-one swap with some of the three carriers' later model 747-300s and 747-400s, says Andrews.
SAA's almost monopolistic regional services into sub-Saharan Africa are attractive to most of the major alliances and the struggle for an equity stake is expected to be fierce. Among the contenders, British Airways and Lufthansa both desperately want to expand their influence in Africa - one of the last untapped continents in global alliance networks. "Also, Swissair seems to be bringing much focus to the party and strong allies in the process," said Andrews.
Lufthansa's close association with SAA may give it the upper hand. The two carriers are planning to integrate their cargo networks with those of SIA and DHL.
Source: Airline Business
