South African Airways has set out the details of its Business Rescue Plan after entering bankruptcy protection in December 2019. The airline shared plans on June 16th to streamline its route network and increase its fleet to 26 aircraft by the end of 2021.
The week has been pivotal for the future of South African Airways. Back on May 18th, the airline was given just 25 days to develop a new strategy. Since then, it appears that South African Airways has delivered. On June 16th, it issued a 110-page rescue plan detailing how it plans to become self-sufficient in the future.
Among the issues that needed to be addressed was how the airline, which has failed to make a profit since 2014, would move away from its government dependence. In the document, it said,
‘’..The Government has affirmed that it supports a Business rescue which results in a viable and sustainable national flag carrier that.…will not be dependent on further future bailouts from the fiscus.”
To do this, SAA is planning to emerge into the market as and when coronavirus restrictions allow. It will focus on its domestic route network first and build it to full capacity before moving onto international routes. Additionally, it will strengthen its fleet, giving it the flexibility to branch into new markets when the demand emerges.
Perhaps one of the most exciting developments in the SAA Business Rescue Plan is the fact that the airline is planning to update its fleet. It has a structured and measured approach to do so, which involves slowly adding aircraft, by type, over the next 18 months.
Between next month and February 2021, South African Airways will prioritize the addition of six narrow body aircraft. Its fleet at the time of the Business Rescue included five A330-300 aircraft and 14 A340s in two varieties.
By March 2021, SAA believes that it will be ready to increase its fleet by more than 200%. It will look at integrating 10 small narrow body aircraft and an additional three narrow bodies. Its narrow body fleet will then stand at nine aircraft. These additions will bring the total fleet size to 19 aircraft by November 2021.
Finally, by December 2021, the airline will acquire seven widebody aircraft. This fleet variety will allow South African Airways to service 27 cities across the world.
South African Airways also plans to streamline its network offering. Though unlike its fleet to which it will be adding, the airline plans to drop out of some of its current cities. It will remove four international routes to the following destinations: Hong Kong; Munich- Germany, Sao Paulo –Brazil and Guangzhou.
In addition, it will stop flying to Abidjan and East London in South Africa.
The majority of SAA’s services going forward will be to regional destinations like Dar Es Salaam, Lagos, and Nairobi. It will also offer three domestic flights to Cape Town, Durban and Port Elizabeth as well as five international routes to: Frankfurt –Germany, London –UK, New York – US, Perth – Australia and Washington – US.
Ever optimistic, the airline hopes to be up and running as coronavirus lockdown eases. It says,
“One of the outcomes of the Proposed Restructure is the commencement of a full domestic network and schedule starting in Jan 2021, operated by the restructured national airline.”
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