Moneyweb
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4 minute read
25 Oct 2018
12:29 pm

Comair budgets R100m to clean up SAA’s mess

Moneyweb

CEO Erik Venter's letter speaks out about flight delays, which they are now taking steps to counter.

SAA Technical is a subsidiary of struggling national carrier South African Airways. Picture: Shutterstock

JSE-listed airline group Comair has budgeted R100 million to curb the increasing flight delays that are the result of problems with scheduling of aircraft maintenance by its supplier SAA Technical.

Comair CEO Erik Venter disclosed the extent of the problems in an open letter to customers and stakeholders distributed on Wednesday.

SAA Technical is a subsidiary of struggling national carrier South African Airways that was thrown a R5 billion lifeline by Finance Minister Tito Mboweni in his medium-term budget policy statement on the same day.

Moneyweb reported in April that Comair is preparing to move its maintenance business from SAA Technical due to the technical and operational delays caused by the supplier. Comair is SAA Technical’s biggest external client and the source of the biggest chunk of SAA Technical’s R703 million annual external revenue.

In 2016/17 SAA Technical recorded a R239 million operating profit, while the SAA group showed a R3.7 billion operating and R5.4 billion net loss.

Read what Venter had to say below:

To our valued customers and stakeholders,

 You may be aware that domestic airlines in South Africa have encountered flight delays in recent months. Unfortunately, Comair’s two airline brands, kulula.com and British Airways (which Comair operates under licence in Southern Africa), have also been affected.

Comair holds itself to [the] highest standards of performance and won’t compromise on safety. The delays are a result of problems with the scheduling of maintenance and challenges with logistics at SAA Technical, which maintains the aircraft of Comair’s two airline brands, and those of other local airlines.

We are actively working with our internal and external stakeholders to address the underlying causes of the delays and return our on-time performance above the 85% threshold our customers are used to.

Below are some of the steps we are taking:

  • As far as possible, Comair has moved all major maintenance requirements overseas;
  • Comair has, with Lufthansa Technik (LHT), initiated registration of an AMO (Approved Maintenance Organisation), with the objective of moving Comair’s new aircraft deliveries directly to LHT AMO as they arrive in South Africa. Unfortunately, it takes some time to obtain all the necessary licences from the SACAA (SA Civil Aviation Authority) and Acsa (Airports Company of SA);
  • Comair is retaining five full-time back-up aircraft to its fleet of 21 scheduled aircraft. This is an extraordinary reserve ratio for any airline but necessary in the current circumstances.
  • In addition, Comair has instituted a wet-lease (hiring an aircraft, including its crew) of an Airbus A320. This will ease pressure on our aircraft availability, crew and rosters. Comair will retain the lease as long as needed;
  • Comair has also instituted an ad-hoc wet-lease of a Boeing B737-300. This is a smaller aircraft than the others in the Comair fleet and Comair has requested permission from British Airways to use it for the British Airways brand as well, so the aircraft can operate on lower-volume flights and routes;
  • Comair has cancelled all non-critical crew duties to ensure maximum crew availability for flight operations, especially where crew duties have been disrupted by delays;
  • Comair’s engineering team is actively involved at SAAT from 04h00 every morning to assist in getting its aircraft online, on time and to improve coordination with Comair’s operations department;
  • Comair’s Customer Relations team is implementing further improvements in communication to customers when delays occur;
  • Comair will take delivery of two new Boeing 737 MAX 8 aircraft in February 2019 and then five B737-800s on lease, which will arrive between April and September 2019. All will be maintained at the new LHT facility. These aircraft also have a less demanding maintenance schedule than the aircraft that they replace: less time on the ground, more time serving our customers.

I realise that this is a rather technical explanation, but I hope it helps clarify that Comair takes very seriously any inconvenience experienced by our customers and has budgeted R100 million to attempt to alleviate the situation while working on long-term solutions.  As stated, we won’t compromise on the safety of our personnel and valued customers and we are working on, and investing in ways to resolve the cause of the problem.

We have taken the decision to manage the delays and still get our customers to their destinations, rather than to simply cancel our flights, which would improve our on-time statistics but [be] at the expense of our customers.

Thank you for your support during this disruptive period.

Sincerely

Erik Venter

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