South African Airways (SAA) aspires to return to profit within three years, following the carrier’s loss of R5.6-billion in 2017.
SAA plans to do so by reducing the size of its network, and also transferring planes to its lower cost carrier, Mango. The turnaround of the state-owned airline is among the most urgent of priorities for newly appointed Minister of Finance, Nhlanhla Nnene.
According to a statement released by South Africa’s General Auditor last week, SAA may no longer be able to operate as a going concern.
Vuyani Jarana, SAA’s first permanent CEO to be appointed in three years, is positive that the airline has a clear strategy to turn over a profit. ”We are looking at a three-year window to get to a break-even point. We continue to revise the strategy as we see more opportunities,” Jarana said.
He also mentioned talks with the National Treasury to fund new plans, and a general meeting between the National Treasury and SAA at the end of March. A fund-raising plan last year to sell a stake to an equity partner will have to be shelved until the balance sheet has been repaired, the CEO said.
The company has halved its flights from Johannesburg to London’s Heathrow airport, and has also cancelled and reduced the frequency of flights to Africa capitals. This includes flights to Abuja, Kinshasa and Luanda.
According to its most recent annual report, SAA has a fleet of more than 50 planes and flies to cities in 25 countries.
SAA will still continue operating to Port Elizabeth and East London:
– Port Elizabeth daily flights are reduced from four to two
– East London daily flights are reduced from three to two
When asked about possible changes to other domestic routes, SAA Spokesperson Tlali Tlali said that changes to this particular route involve equipment changes only. There are plans to replace the wide-body aircraft with a narrow-body aircraft for afternoon flights.