Old planes are no excuse, but new jets will help SAA

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The Chairwoman of the SAA board, Duduzile Myeni, made an interesting observation yesterday. She said that the airline’s low-cost subsidiary, Mango, had been making a profit using the same old fuel inefficient aircrafts that the national carrier blames for its losses.

The planes handed down to Mango are older than those retained by SAA. For instance, the national airline told Parliament yesterday that as its new single-aisle Airbus A320 planes arrived, it would be handing down its current Boeing 737s to Mango.

So far, only two of the 20 A320 aircraft ordered in the 2002/03 financial year have been delivered to SAA. The airline chief executive, Monwabisi Kalawe, said he was putting pressure on Airbus to fast-track the delivery of the remaining 18, with the last batch expected for delivery in 2017.

For its wide-bodied fleet, SAA has until October to choose a preferred manufacturer between Boeing and Airbus. The first batch of the long-distance two-aisle planes is expected for delivery in 2017.

With this change in its fleet, SAA should do better as the new planes will be more fuel efficient. But should and would are separate things and it is not guaranteed that SAA will do better.

Myeni pointed out that even in the domestic market, where SAA was still profitable, it had abandoned routes because they were loss-making. However, competitors manage to make profit on the same routes.

The issue of competition is more complex than two planes owned by different airlines taking off for the same destination. For instance, Kalawe pointed out that Middle Eastern airlines were deploying newer aircraft in African markets, which was why they could afford to offer attractive prices for price-sensitive consumers. The competitive landscape is also affected by the fact that while SAA is not allowed to fly domestic routes anywhere else in the world, foreign airlines are allowed to operate in South Africa.

Kgomotso Modise, the deputy director-general of transport at the Department of Public Enterprises, said the department has recently begun discussions with the Department of Transport to review the policies that allowed this. She said it was trying to promote more liberal airline services between African countries.

Meat

Phew!!! That is what I imagine Minister Tina Joemat-Pettersson said when she read the notice from the International Animal Health Organisation lifting the three-year ban on South African red meat exports. Livestock farmers and other producers of animal products, such as the wool and dairy industry, are pleased too.

The minister’s name has made headlines for all wrong reasons, which is why she started yesterday’s press briefing in Pretoria by saying: “I have a good story to tell.”

The country’s battle against foot-and-mouth disease should not be underestimated. It showed unity and persistence on the side of the government and the industry – and yes Joemat-Pettersson’s Department of Agriculture, Forestry and Fisheries (Daff) deserves all the praises.

Although the industry has reportedly lost about R4 billion during the ban, the victory proved sweeter than before. As soon as red meat exporters are ready to export, they stand to make gains from the rand/dollar exchange rate. The Red Meat Producers’ Organisation congratulated the department and will work closely with it in order to comply with control measures.

Milk South Africa, which was also affected by the ban, thanked Dr Michael Modisane, the chief director of the department, for his dedicated assistance in the process of having the ban successfully lifted. “We all came through a very difficult time, and communication between livestock industries and Daff has definitely improved,” it said.

In a press briefing, the minister said 27 veterinary clinics had been procured and would be deployed in provinces. The clinics come with operating theatres, and will bring veterinary services to rural areas.

Edited by Peter DeIonno. With contributions from Londiwe Buthelezi and Nompumelelo Magwaza.


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