544 days later, and SAA is finally back in the air

South African Airways (SAA) is back in business.

Thursday morning sees the slimmed-down airline operate its first flight – from Johannesburg to Cape Town – after the airline was grounded in March last year.

The airline resumes operations as a shadow of its former self, operating just six aircraft – down from 46 in its heyday.

SAA CFO Fikile Mhlontlo said in a media briefing on Wednesday that South Africans can lay their fears of travelling in old aircraft to rest, as the airline has signed new leases that come with new aircraft.

“The fleet that we had was returned to [the] lessors. We are starting with a new fleet as part of the new lease arrangements, so some of the issues that were related to the [previous] fleet should be issues of the past,” Mhlontlo said.

The airline will resume regional operations next week.

SAA interim CEO Thomas Kgokolo told parliament at the beginning of the month that SAA will operate return flights on the popular Johannesburg-Cape Town route three times a day.

Its regional service will include daily return flights between Johannesburg and Harare in Zimbabwe, with three return flights a week to Accra in Ghana, Kinshasa in the DRC, Lusaka in Zambia and Maputo in Mozambique.

At the relaunch of the airline, Kgathatso Tlhakudi, deputy director-general in the Department of Public Enterprises, said there is no longer room for bailouts for the national carrier and restoring the airline’s financial position will now lie squarely at the feet of SAA’s proposed new owners, the Takatso Consortium.

“Going forward [SAA has] been put in the hands of business people … people [who] have the technical skills,” said Tlhakudi.

Return to profitability will take time

Takatso was announced as the preferred bidder in SAA three months ago, setting out to invest R3 billion over the next three years to turn the airline around and make it profitable.

The last time the national airline reported a full-year profit was a decade ago. It has since been entangled in a distressing web of mismanagement that has cost taxpayers hundreds of millions of rands in bailouts.

Mhlontlo said given that the Covid-19 pandemic has put the aviation industry – and the wider travel and tourism sector – under significant strain, it will take a while before the airline starts making a profit.

“We are coming from being an airline which [had] about 46 aircraft to an airline that is starting very small – starting with about six aircraft. So it’s a gradual exercise.”

He added that while aviation is a “difficult industry” the new team has done a host of things to at least start in a direction where the airline “really stands a chance”.

Good governance and no political interference

SAA interim board chair Geoff Qhena said the board, as a transitional structure, is focused on instilling a culture of good governance at the airline and is optimistic that political interference will be a thing of the past.

“The ethos of management where you have government and changing political leadership of the airline from one minister to the other – that will no longer have that kind of an impact as we’ve had previously,” Qhena said.

“The appointment of senior leadership and the appointment of board members [is] going to be based strictly on merit, where the private sector shareholder of course has a stake in the success of the industry, and they will be much more aggressive in ensuring that is done,” he added.

SAA ‘a victim of crime’ – O’Sullivan 

Forensic investigator Paul O’Sullivan attended the event and said he will be on that first ‘new SAA’ flight to Cape Town.

O’Sullivan – who says he is committed to holding those responsible for the airline’s downfall accountable – believes the pandemic has benefitted the national carrier.

He says Covid was bad for the whole world “but in a way it’s been partly responsible for saving SAA because it forced SAA to get into a lower platform, if you like, and then of course with [a new] administration”.

He added: “SAA is a victim of crime [and] the people that committed that crime will be held accountable …

“If the state doesn’t prosecute Dudu Myeni, I will,” he said.

Mango

Mhlontlo was tight-lipped about SAA subsidiary Mango.

The low-cost airline’s flights were grounded for the second time after it failed to honour outstanding payments to Air Traffic Navigation Services and went into business rescue at the end of July.

Mango had also halted flights briefly in April because of outstanding payments to Airports Company South Africa (Acsa).

By Akhona Matshoba

This article first appeared on Moneyweb and was republished with permission. Read the original article here.