SAA’s chief executive is hoping that the airline’s request for a R6 billion government injection will be granted, enabling it to renew its fleet, introduce premium economy class and expand its business class.
The request will be tackled by Public Enterprises Minister Malusi Gigaba in his budget vote speech in Parliament today, but the department would not comment yesterday on whether the state-owned carrier would get the funds.
SAA chief executive Siza Mzimela raised the issue of its shareholder’s monetary support at a Tourism Indaba breakfast in Durban yesterday.
“It must be clear that we are not asking for a bailout, but… for proper capitalisation to buy necessary aircraft,” she said.
SAA told Parliament in February that it needed R6bn from the government for its recapitalisation and expansion plans. This would be in addition to the R1.3bn subordinated loan SAA already had.
Mzimela said SAA had not been untouched by strenuous economic challenges faced by the industry at large, and hinted that the airline had been hit by additional fuel costs of R2.6bn for this financial year.
Mzimela could not elaborate on SAA’s performance, citing the company’s preparation for its annual results in August.
She said SAA’s growth strategy included the replacement of the fleet of short-haul Boeing 737-800s by 2017 and the delivery of 20 new fuel-efficient Airbus A320s in the next five years.
Two A320s were delivered in January and February. For the long-haul fleet, the airline had six A330-200 aircraft delivered last year.
These six new aircraft cost R1bn each and would not be bought outright. Instead, they would be leased from Irish-based company Aircastle.
“SAA expects to finalise a major aircraft order by the end of the year to replace current non-efficient long-haul aircraft,” Mzimela confirmed.
SAA had recently renewed the leases of some of its Boeing 737-800s for periods of between five and 10 years. SAA had Airbus A319s in its regional fleet and recently acquired two A380s on a temporary lease. The firm’s growth strategy included increasing destinations in African countries.
A route would be launched to Cotonou in Benin this week, which would fly from Johannesburg twice a week.
This year alone the airline introduced three routes to the African cities of Kigali, Bujumbura and Ponte Noire “without increasing the number of aircraft but… through increasing efficiency”, she said.
Mzimela said SAA was making great strides as its passenger revenue rose 20 percent in the last quarter of the 2011/12 financial year. And the airline had a solid yield improvement of 17 percent.