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.
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
SAA's domestic flights in South Africa contributed profits of R100m in 2006.
SAA's international flights made losses of R600m in 2006:
In spite of full aircraft on London to Johannesburg flights, SAA ran losses of R500m in 2006 on this route, apparently because of the cost of the 747s (but why didn't they push up prices?). SAA will continue to operate 3 flights a day between Johannesburg and London, but using airbusses.
African flights made SAA R500m profit.
Flights between South Africa and the USA were “problematical".
SAA plan on introducing new flights from Munich to Johannesburg and flights from Johannesburg to Libreville.
Category : South African Airways