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SAA details restructuring

On the 3rd of May 2007, Public Enterprises Minister Alec Erwin gave SAA 2 years to restructure and show results. Yesterday (4 June 2007) Khaya Ngakula, CEO of SAA, announced that he expected SAA would return to profitability in the next year and a half - giving him 2 months to spare before Erwin's deadline of 2 May 2009. Ngqula, CEO of SAA, announced some details of their planned restructuring:

  • SAA will be restructured into 7 profit-seeking subsidiaries.

  • the aim is to save R630m on personnel; with 30% of of managers being retrenched.

  • six boeing 747 aircraft, costing a billion rand a year, are to be grounded; with their 28 pilots being retrained on other planes. Former CEO Coleman Andrews acquired the aircraft under a lease and buyback deal.

  • SAA's Cape Town - Frankfurt flights, Paris to Johannbesburg flights and Zurich to Johannesburg flights are to be stopped, as these routes are loss-making.

  • personal tax-free travel allowances of up to R630 per day when travelling offshore have been halted. Now the crew have to claim the expenses they actually incurred (this brings SAA in line with private sector practise).

“SAA you have my full support but you will experience very tough love in the coming year. A great airline lies in your hands.” Alec Erwin

Profitability of routes

  • SAA's domestic flights in South Africa contributed profits of R100m in 2006.

  • SAA's international flights made losses of R600m in 2006:

Category : South African Airways

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