http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.60Change: -0.03
R/$ = 10.56Change: -0.01
Au 1283.61 $/ozChange: 0.24
Pt 1401.00 $/ozChange: -2.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Nelson Mandela 1918 - 2013   Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science & Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
May 17, 2013

Network changes likely to flow after SAA links up with Etihad

Back
Abu Dhabi|Beijing|Johannesburg|Airbus|Boeing|Etihad Airways|Flow|Projects|South African Airways|Africa|Asia|South America|China|South Africa|United Arab Emirates|OR Tambo International Airport|Airline|Embattled Airline|Flow|Transport|James Hogan|Nico Bezuidenhout|Middle East
abu-dhabi|beijing|johannesburg|airbus|boeing|etihad-airways|flow-company|projects|south-african-airways|africa|asia|south-america|china|south-africa|united-arab-emirates|or-tambo-international-airport-facility|airline|embattled-airline|flow-industry-term|transport-industry-term|james-hogan|nico-bezuidenhout|middle-east
More Insight
© Reuse this



National carrier South African Airways (SAA) has indicated that the codeshare agreement signed with Etihad Airways, of the United Arab Emirates (UAE), formed part of its yet-to-be-announced long-term turnaround strategy by creating the ‘platform’ for a network re-evaluation that could facilitate its possible near-term exit from some unprofitable Asian routes.

Following the signing of the memorandum of understanding by Etihad president and CEO James Hogan and acting SAA CEO Nico Bezuidenhout in Johannesburg, SAA would be in a position to place its ‘SA’ code on 12 Etihad destinations in the Middle East and Asia, serviced out of Abu Dhabi.

In return, the UAE carrier would place its ‘EY’ code on flights from OR Tambo International Airport to ten other destinations in South Africa, Africa and South America.

Bezuidenhout refused to be drawn on which routes might be terminated. But it had been widely speculated that SAA was keen to extricate itself from flying directly to Beijing, China, while still offering it as a destination through partnership arrangements.

He said the Etihad association could enhance yearly revenues by more than R100-million. However, it should also be viewed as part of a broader thrust to lower SAA’s operating costs and return it to profitability in the coming years.

The embattled airline, which reported a loss of R1.3-billion in 2011/12 and cumulative losses of more than R14-billion over the last number of years, was currently pursuing 38 separate ‘cost-compression projects’ and had reportedly shaved R1.2-billion off its costs in 2012/13 – its results would only be released at its annual general meeting in September.

However, Bezuidenhout indicated that the airline was still about 20% “off the mark”, compared with the operating costs of other airlines, and that part of the remedy lay in the use of partnerships.

There was also potential, in the longer term, for SAA and Etihad to combine their purchasing power in a bid to lower the cost of procuring everything from aircraft and maintenance services through to catering equipment and aircraft components.

Hogan said it was premature to speculate on what the relationship could mean for SAA’s wide-body refleeting plan, but he indicated that the airline had worked with a number of its other partners in sourcing aircraft, engines, components and catering services.

Bezuidenhout said SAA intended to engage with both Airbus and Boeing on its fleet needs, but also indicated that it would “avail” itself of Etihad’s prowess in this area.

Likewise, he saw a myriad of other “value-chain opportunities” arising out of the “scale” offered by the two airlines, which collectively transported 20-million passengers yearly.

For Hogan, the rationale for the tie-up arose from the fact that Africa had emerged as one of the fastest-growing aviation markets globally, with the International Air Transport Association forecasting yearly compound growth of 6.8% in African air-passenger travel between 2013 and 2016. Air cargo, meanwhile, was expected to rise by more than 4% over the same period.

Participation in that growth, Hogan said, was key to sustaining Etihad’s position as one of the fastest-growing airlines internationally.

Edited by: Martin Zhuwakinyu
© Reuse this Comment Guidelines
 
 
 
 
 
 
 
 
Other News This Week News
The Electronic Systems Laboratory (ESL) of the Department of Electrical and Electronic Engineering at Stellenbosch University is strongly reaffirming its position as one of South Africa’s leading centres for satellite technology and expertise. It is currently...
MORE IN SA Phase 2 should see local content on the mainline locomotive increase from 65% to 80% by the end of 2014
The world’s lowest-cost diesel-electric locomotive is not made in China, but in Pretoria, at RRL Grindrod Locomotives’ newly upgraded 30 000 m2 plant. The company’s locomotive pricing is “more competitive than any other original-equipment manufacturer (OEM)...
The South African Defence Review 2012, released to the public at the end of last month (despite the year given in its title) recommends the creation of the post of Chief Defence Scientist. This official would be responsible for the management of defence technology...
More
 
 
Latest News
Updated 1 minute ago The extensive compliance processes instilled to regulate the manufacturing of the set-top boxes (STBs) required for South Africa’s migration to digital terrestrial television (DTT) has emerged as a serious weakness as industry gears up for the imminent and...
Updated 31 minutes ago Honda has unveiled the newest version of Asimo, its advanced humanoid robot, now featuring the ability to communicate in sign language and climb stairs without stopping. Asimo, which stands for Advanced Step in Innovative Mobility, was first introduced 14 years ago....
DPE director-general Tshediso Matona
Updated 42 minutes ago Department of Public Enterprises (DPE) director-general Tshediso Matona confirms that the interdepartmental task team established to find a solution to Eskom’s financial problems has agreed that further support will be required. However, he says it is premature to...
More
 
 
Recent Research Reports
Steel 2014: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2014 report provides an overview of the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon steel and stainless...
Projects in Progress 2014 - First Edition (PDF Report)
This publication contains insight into progress at the delayed Medupi and Kusile coal-fired projects, in Mpumalanga and Limpopo respectively, as well as at the Ingula pumped-storage scheme, which is under construction on the border between the Free State and...
Automotive 2014: A review of South Africa's automotive sector (PDF Report)
The report provides insight into the business environment, the key participants in the sector, local construction demand, geographic diversification, competition within the sector, corporate activity, skills, safety, environmental considerations and the challenges...
Construction 2014: A review of South Africa's construction sector (PDF Report)
Construction data released during 2013 hints at a halt to the decline in the industry during the last few years, with some commentators averring that the industry could be poised for recovery. However, others have urged caution, noting that the prospects for a...
Electricity 2014: A Review of South Africa's Electricity Sector (PDF Report)
This report provides an overview of the state of electricity generation and transmission in South Africa and examines electricity planning, investment in generation capacity, electricity tariffs, the role of independent power producers and demand-focused initiatives,...
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
 
 
 
 
 
This Week's Magazine
The Electronic Systems Laboratory (ESL) of the Department of Electrical and Electronic Engineering at Stellenbosch University is strongly reaffirming its position as one of South Africa’s leading centres for satellite technology and expertise. It is currently...
MORE IN SA Phase 2 should see local content on the mainline locomotive increase from 65% to 80% by the end of 2014
The world’s lowest-cost diesel-electric locomotive is not made in China, but in Pretoria, at RRL Grindrod Locomotives’ newly upgraded 30 000 m2 plant. The company’s locomotive pricing is “more competitive than any other original-equipment manufacturer (OEM)...
The South African Defence Review 2012, released to the public at the end of last month (despite the year given in its title) recommends the creation of the post of Chief Defence Scientist. This official would be responsible for the management of defence technology...
AltX-listed engineering technology company Ansys has been awarded an R188-million contract by Transnet to supply integrated dashboard display systems to the freight rail utility’s locomotives. Black-owned and controlled Ansys developed the bespoke integrated system...
South Africa’s sole nuclear power station Koeberg, which is located in the Western Cape, breached a major operations milestone on April 4, which marked the thirtieth anniversary of Unit 1 having been connected to the grid. Eskom, which operates the two-unit plant,...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks