South African Airways (SAA), now under its new chief executive Coleman Andrews, has laid out plans to give British Airways much stronger competition on the lucrative London routes and may be seeking closer ties with Virgin Atlantic to help achieve its goal.
SAA recently poached Virgin's general manager for Southern Africa, David James, who will head up SAA's new global sales network. The move was seen by observers as an indication of closer ties and the start of an effort to "gang up" on BA. The UK carrier has 19 frequencies a week to South Africa compared with 15 for SAA and seven for Virgin.
Andrews says that by early next year, SAA will have put another four flights a week onto the route and intends to increase frequencies to match the 26 held by Virgin and BA.
The move is part of an aggressive new attitude to international competition brought in by Andrews, who is also keen to turn around the carrier's losses ahead of privatisation, now expected by next April.
"It's no more Mr Nice Guy. The government was giving away too much to our foreign competitors and SAA did not seem to care. All that has changed and we are going to fight for our birthright," he says, adding that the airline would dramatically alter its international strategy to give it wider penetration and a broader sales base.
His plan would include "thicker pipeline" services on the seven or so more profitable international routes - among them New York, Miami, London, Frankfurt, Zurich, Sydney and Bangkok - and more use of codesharing on less profitable routes.
He also intends reducing SAA's continental European hubs from five to two. SAA would probably retain services to Zurich and Frankfurt and enter into codeshares with Lufthansa and other partners to Paris, Amsterdam and Copenhagen.
Andrews remains adamant that SAA needs to expand its fleet. Both Boeing and Airbus have delivery positions to offer after order cancellations and deferrals in Asia and Andrews believes that discounts of 25-30% are available. He adds, however, that the airline is also looking at leasing options and warns Boeing that the $60 million in deposits it still holds from SAA's stalled 777 deal must be used to pay off future purchases. "Or that's the end of Boeing at SAA," he says.
SAA remains open to alliances but Andrews cautions that deals will not be done with airlines that simply want to "exploit" the South African carrier. The airline is expected to name its chosen trade alliance partner, which is widely tipped to be Lufthansa, by the start of November.
Source: Airline Business
