SAA to get new Airbus fleet soon

Cape Town - South African Airways (SAA) will start taking delivery of a fleet of 20 new Airbus A320 aircraft over the next few months.

Minister of Public Enterprises Malusi Gigaba said the order is valued at around R10bn over the long term, and forms part of a broader fleet replacement plan that aims to address the fuel inefficiency of SAA’s current long-haul fleet.

New fuel efficient aircraft are considered key to turning the struggling national carrier around.

The order dates to 2002, when SAA tendered for a new fleet plan to replace its current fleet of ageing Boeings. It is understood that SAA will be leasing the aircraft. The original plan was to purchase the planes.

Gigaba was delivering the department’s budget vote in parliament on Tuesday.

He said it is “no secret that SAA has had a turbulent year in terms of its leadership and governance”.

“I hope that the appointment of the new CEO, Mr Monwabisi Kalawe, and the finalisation of the long-term turnaround strategy will provide SAA with the stability, leadership and direction it requires decisively to turn around.

“SAA has produced a number of turnaround plans over the last 10 years, yet none have put the airline on a sustainable footing.”

Gigaba said  the department of public enterprises, in collaboration with the SAA board, will be designing a special governance arrangement to ensure that government is able to rigorously monitor progress on the implementation of the airline’s new turnaround strategy.

“I am happy to report  that SAA has already begun to implement the turnaround strategy and has achieved its cost compression target of R1.3bn for the year ending March 2013,” Gigaba said. 

He added that over the next year the airline will focus on ensuring that its cash position is stabilised, the cost compression programme accelerated, the international network reviewed and the long-term fleet plan finalised.

Freudian slip?

Gigaba also touched on the other state-owned airline, South African Express (SAX), and had the gallery laughing when he accidently said sex rather than sax. 

The minister said the department and the South African Express board are working to develop a comprehensive turnaround strategy for this company too.

“It is pleasing to note that SAX has already cut R129m in costs in the last financial year. Over the coming year SAX will continue to focus on enhancing efficiencies and cutting costs, improving customer service and enhancing internal controls.”

Gigaba said South African Express plans to have all outstanding audits finalised by the end of July.

 - Fin24

*Follow James-Brent Styan on Twitter at @jamesstyan.
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Edgar Andres Garcia 2013/05/14 11:25:19 AM
Good luck with those A320. The current Boeing are horrible, and it doesn't make sense to mix fleet brands in that way. Hopefully, and all Airbus fleet will help to cut fuel expenses, ease maintenance and training.
Vaughan 2013/05/14 11:28:56 AM
How on earth are Airbus going to fix the problems at SAA. The core of which are mismanagement and abuse of SAA resources.
ISKHOKHO ESINCANE 2013/05/14 11:34:09 AM
well it need bail out again, we kick somebody's ass guess who.
Werner Nel 2013/05/14 11:40:17 AM
As a taxpayer contributing to your cause, can I fly at 90% discount?
Sarah Stanton 2013/05/14 11:51:51 AM
On the taxpayer's dime. (again)
John Nicholas 2013/05/14 12:06:18 PM
They have 737-800s now, which are not less efficient than A320s. On some routes, one will be more efficient than the other, but even if the A320s beat the 737 on our particular local routes, the difference in cost certainly is not "key to turning the struggling national carrier around". Never in a million years. This constant changing between manufacturers must've cost us more money than just sticking to one anyway.
Richard 2013/05/14 12:24:53 PM
Another tax bail out on the horison.
Anton Dekker 2013/05/14 12:26:50 PM
What? Who is getting what kickbacks to make this insane deal come to fruition? R10 billion spend on a ridiculous money losing enterprise! It is not the aircraft that are the problem here, it is the completely incompetent and unqualified management! The fruits of cadre deployment illustrated at its most disgusting form! The SAA, poster child for corruption, nepotism, miss-management, fiscal abuse, non-accountability and plain simple criminal theft, yet our government is willing to recapitalise this national embarrassment to the amount of R10 billion! Where is the outcry from the opposition, the protests from the trade unions and the vocal condemnations from civil society? SAA has proven over and over again that it is completely incapable to compete with the offering from the private sector, yet the idiotic politicians cling to this thing as if their lives depended on it! Numerous, so-called, turn-around strategies have been implemented over the past 10 years, each and every one failing dismally. Very scarce and desperately needed recourses, to the amount of R1.5 billion annually, are wasted keeping this sinking ship afloat. Why don’t they simply sell this national joke to the private sector, and safe the South African tax payers billions? Is it the lucrative kick-backs from this R10 billion deal that makes them hold on to this joke? How can this government get away with this gross misappropriation of money, yet there are absolutely not a squeak of disgust from anyone?
Michael Peters 2013/05/14 12:39:51 PM
How is SAA going to pay for these new aircrafts? Bail out once again. Wait for it.
Nurse Helenk 2013/05/14 12:46:13 PM
The problem is gas guzzling Airbus A340's. They need to be replaced by Boeing 777's or 787's.