National Treasury announced on Friday afternoon that it approved the cancellation of South African Airways’ (SAA) route to Abu Dhabi less than a year after it was launched as a solution to retain route connectivity between South Africa, and China and India.
This comes after SAA suspended its head of commercial, French airlines consultant Sylvain Bosc, following “allegations relating to alleged misrepresentations to the SAA board in respect of the Abu Dhabi route”.
The Abu Dhabi route was launched following the cancellations of loss-making routes between Johannesburg and Mumbai in India as well as Beijing in China. These steps formed part of SAA’s Long-Term Turnaround Strategy (LTTS), aimed at stabilising the airline and returning it to profitability.
At the time, the Abu Dhabi route was presented as a solution to retain air access to India and China, both important partners of South Africa as fellow Brics members. It was argued that by flying to Abu Dhabi, SAA could, through a code sharing agreement with Etihad Airways, continue to offer a service to these destinations as well as a variety of others, while stemming the losses incurred on the Mumbai and Beijing routes.
According to a statement by the Hawks earlier this month, its investigation into the affairs of SAA includes illegal activities, “alleged theft, fraud and corruption involving contracts, agreements, tenders, procurement and irregular closure of SAA routes in Senegal, India and Beijing”.
SAA spokesperson Tlali Tlali told Moneyweb that SAA has recently taken a decision to stop its flights to Abu Dhabi for a period of three weeks, starting February, pending the approval from National Treasury to cancel it permanently. SAA’s decision was based on its on-going assessment of all its routes, which informs the increase or decrease in capacity, he said.
Now that the cancellation has been approved, SAA will have to give notice to a variety of stakeholders, including customers, partners, staff, suppliers and other service providers, as provided for in its agreements with these stakeholders.
SAA will start next week to draft an implementation plan with specific timelines towards the last flight and only then will it be able to announce more detail, Tlali said.
He said it was too early to know what the fate will be of SAA staff who served on the Abu Dhabi route. The airline will look at options to deploy them elsewhere.
He said if SAA’s new direct route to Abuja in Nigeria performs well enough to increase its current frequency of three flights per week, it might create the opportunity to absorb the Abu Dhabi staff there.
Tlali said Air China has, since the cancellation of SAA’s service to Beijing, launched a flight to Johannesburg. SAA’s code sharing agreement with Etihad will continue, which means that passengers can still book flights to Abu Dhabi, connecting to Mumbai and many other destinations. The only difference in future will be that they won’t have a choice of flying with SAA on the first leg to Abu Dhabi, but will fly with Etihad.