SAA in Business Rescue?

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ian16th
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SAA in Business Rescue?

#1 Post by ian16th » Sun Apr 08, 2018 1:53 pm

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Re: SAA in Business Rescue?

#2 Post by ian16th » Fri Nov 02, 2018 2:06 pm

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Re: SAA in Business Rescue?

#3 Post by Capetonian » Fri Nov 02, 2018 4:32 pm

It is beyond time that the ZA taxpayer should continue to pay to keep this dead duck flying, keeping useless political appointees in high positions, and flying their buddies and families around on free tickets.

The sooner it is taken over and run as a business, the better. It will become unrecognisable. Otherwise ZA will end up as yet another third world country with no national airline.

From the best airline in Africa (perhaps against little competition except Air Rhodesia in its day) to one of the worst. In fairness, it never was terribly profitable under the Nats, but it was better managed and the people who worked for SAA knew the industry and could speak at least one of the two official languages competently.
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Re: SAA in Business Rescue?

#4 Post by Capetonian » Tue Nov 06, 2018 8:32 pm

Rivals are strangling SAA’s long-haul business
There is simply very little reason to fly the flag carrier anymore …


Fifty-six. That’s the number of long-haul return flights operated by state-owned carrier SAA each week, with daily outbound and inbound flights between its Johannesburg base and London, New York, Washington (three via Dakar, four via Accra), São Paulo, Frankfurt, Munich, Perth and Hong Kong.

Fifty-six seems a fair amount, until you start comparing this figure to those of rival airlines. Emirates operates 56 return flights to South Africa (Johannesburg, Cape Town and Durban) a week. This summer, British Airways will operate 38 return flights a week (also to those three destinations).

This is not only a numbers game, of course. It would be far more preferable to run a truncated but full – and therefore profitable – long-haul network. Except airlines are a volume business.

And these aren’t apples-to-apples comparisons. Emirates operates an Airbus A380 on one of its four Joburg flights daily, while British Airways now flies two A380s a day between Heathrow and OR Tambo.

The planes SAA operates on its long-haul routes seat between 249 and 317 passengers. On the London route, its A330-300 seats 249. That’s 1 743 seats (to London) a week. British Airways, its direct competitor on this route, has 6 566 seats available a week, just on the twice-daily A380. Add in the 856 seats from four Boeing 787 flights a week and that totals 7 422, more than four times SAA’s capacity!

Virgin Atlantic, which is leasing SAA’s Heathrow slot, enabling it to fly twice daily from Johannesburg, offers more than double SAA’s capacity, with 3 696 seats (one way) each week.

Johannesburg to London

Return flights per week

Seats per week (one way)

British Airways 38 7422

Virgin Atlantic 14 3696

South African Airways 7 1743

Gulf – and other – hub carriers have also increased frequencies and added routes at a staggering pace, mopping up demand while SAA shrinks. Aside from the 56 return Emirates flights to South Africa weekly (28 to Johannesburg, 21 to Cape Town and seven to Durban), Qatar operates 28 flights to the three cities, Turkish Airlines a further 18, Ethiopian 21 (to Joburg and Cape Town), and Kenya Airways 21 to Johannesburg (smaller Etihad only flies once daily from Johannesburg). That’s a total of 144 return flights, nearly three times SAA’s entire long-haul schedule.

It’s not just the direct competition on long-haul routes to Johannesburg that’s throttling SAA. The state-owned carrier’s long-haul strategy seems to be premised on all flights operating from Joburg.

Increasingly, rivals are flying direct to Cape Town as well as Durban, further weakening SAA’s position. During (our) summer, British Airways flies twice a day between Heathrow and Cape Town and, given the constraints around landing slots at Heathrow, has added three flights a week from Gatwick Airport in London. Last week, it started flying direct between Durban and Heathrow three times a week.

Probably the biggest mistake ever made by SAA regarding its long-haul business was selling the valuable Heathrow landing slot for its Cape Town-London flight in 2012.

With the direct options from Durban (Emirates, Qatar, British Airways and Turkish Airlines), there’s very little reason to fly overseas via Johannesburg. And from Cape Town, there’s practically no reason.

The Western Cape Government’s Cape Town Air Access initiative from 2015 via agency Wesgro has been an astonishing success. There are direct flights from Cape Town to the UK, three destinations in Germany, Switzerland, France, the Netherlands, Austria (!), Dubai, Turkey, Qatar, and Hong Kong.

These flights to/from Germany (and, from last month, Austria) mean there’s precious little reason for German tourists to fly to the Cape via Joburg. How long SAA will be able to sustain direct daily routes to both Frankfurt and Munich remains to be seen.

The new seasonal direct route to Hong Kong (Cathay Pacific) from Cape Town (three times a week between November and February) will put further pressure on SAA’s only route to the Far East.

Regional stronghold under threat

And SAA’s only real remaining stronghold – its regional flights to African destinations, where it is often the only operator – is increasingly under threat.

Wesgro has also been successful in getting African airlines to fly directly to Cape Town, with flights from Botswana (Gaborone on Air Botswana and Maun on Airlink), Zimbabwe (Victoria Falls on Airlink or Kenya Airways, and Harare on RwandAir), Zambia (Livingstone on Kenya Airways), Rwanda (Kigali on RwandAir), Angola (Luanda on TAAG), Namibia (Windhoek and Walvis Bay on Air Namibia) and Mauritius on Air Mauritius. Many of these routes are operated daily, which is surely placing some pressure on SAA’s regional load factors.

Airlink also shuttles inbound tourists between Cape Town and the Kruger National Park (Hoedspruit, Skukuza and Nelspruit). This means that tourists from Europe and Asia can fly directly to Cape Town, then to their ‘safari’ in the Kruger, Botswana or Vic Falls, then return to Cape Town to fly out.

A decade ago, often the only option to do this would be on SAA, via Johannesburg.

Government’s oft-repeated contention that SAA is strategically important and an “enabler for tourism” no longer holds water. Tourist arrivals are increasing in spite of SAA, not because of the state-owned carrier.
One thing you can say for the French, when civilization falls they have less far to fall than everyone else.

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Re: SAA in Business Rescue?

#5 Post by Cacophonix » Tue Nov 06, 2018 9:15 pm

Capetonian wrote:
Tue Nov 06, 2018 8:32 pm
Rivals are strangling SAA’s long-haul business
There is simply very little reason to fly the flag carrier anymore …
What an excellent, detailed and informative post that is also so depressing to South Africans. Good to hear though that Cape Town is emerging unscathed in terms of connections from the machinations of the politicised and incompetent ANC manipulated management of SAA.

Appreciate the post Capetonian.

Caco

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Re: SAA in Business Rescue?

#6 Post by ian16th » Tue Nov 06, 2018 10:13 pm

Capetonian wrote:
Tue Nov 06, 2018 8:32 pm
Rivals are strangling SAA’s long-haul business
There is simply very little reason to fly the flag carrier anymore …

With the direct options from Durban (Emirates, Qatar, British Airways and Turkish Airlines), there’s very little reason to fly overseas via Johannesburg. And from Cape Town, there’s practically no reason.
Err what about destinations in Asia such as China, India, Malaysia, Singapore, Australia and N Zealand?
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Re: SAA in Business Rescue?

#7 Post by ian16th » Tue Nov 27, 2018 7:42 pm

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Re: SAA in Business Rescue?

#8 Post by Capetonian » Thu Dec 20, 2018 11:45 am

December 18, 2018

South African Airways and Emirates have agreed to extend their code-sharing agreement, in a boost to the loss-making African carrier.

The enhanced agreement means the codeshare will be expanded across both carriers’ networks, with SAA adding its codes to Emirates eight daily South African flights. Emirates flies four times daily to Dubai from Johannesburg, three times per day from Cape Town and daily from Durban.

The airlines said they will work towards adding route network synergies including cargo services and flight schedules that will improve connectivity and increase passenger numbers.

Also included in the new agreement are plans to enhance the frequent flyer programmes of both airlines.

“This agreement marks a significant forward step in the execution of our strategy and in transforming our business,” SAA chief executive Vuyani Jarana said. “Our route network and that of Emirates complement one another. The expansion of our commercial relationship will further strengthen key focus areas of the implementation of our turnaround plan.”

SAA hasn’t made a profit since 2011, but hopes to turn the situation around by 2021 with cost cuts. (Hoping and expecting are two very different things!)

The airlines started sharing codes in 1997, the first the UAE carrier had signed. The existing deal benefited 90,000 passengers in 2017/18, the airlines said.
One thing you can say for the French, when civilization falls they have less far to fall than everyone else.

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