South African Airways (SAA), the country’s State-owned flag carrier, is not negotiating any sale of shares to anyone else. This was affirmed by SAA Acting CEO Nico Bezuidenhout at a media briefing at the end of last month. “There is no discussion with any airline, [Persian] Gulf or otherwise. And none that my shareholders [government, through the National Treasury] have made us aware of.”
SAA does have a long-standing code-sharing agreement with Dubai-based airline Emirates and recently entered a similar agreement with Abu Dhabi-based Etihad Airways. SAA is said to be the only airline with code-sharing agreements with both these airlines. “We will continue deepening these commercial relationships,” he stated. “There is a commercial benefit for us, there is a commercial benefit for Emirates, there is a commercial benefit for Etihad.”
Bezuidenhout assured that SAA would work closely with any and all airlines that brought commercial benefit to his company. Thus, recently, SAA concluded a code-sharing agreement with Ghanaian airline Africa World Airlines, which operates a small fleet of regional jet airliners and connects Accra to a number of other centres in Ghana and to Lagos, Nigeria. This relationship supports SAA’s new route to Washington, DC, via Accra. Hitherto, SAA has flown to and from Washington via Dakar, Senegal, seven times a week. From August 2, it will fly via Accra four times a week and via Dakar three times a week (although there will also be four flights just between Johannesburg and Dakar each week).
The adoption of this new route was the “purest, purest commercial” decision, he reported. It was done because, while Dakar was a single point, the existence and relationship with Africa World Airlines made Accra the hub of a local network, capable of feeding passengers into, and distributing them from, the SAA flights. “We’d like to build Ghana as a bigger hub. That is not mutually exclusive from building other hubs in West Africa.” However, that would, as in the Accra case, require local airline partners.
“A key focus for SAA is how to grow our African revenues substantially,” he noted. “Our intent is to reclaim our position as the leading carrier on the African continent.” Africa continues to be the airline’s best performing business area. “Despite the Ebola epidemic in parts of West Africa, all SAA’s African routes have seen an upward trend. The company was able to increase its capacity on its African routes by adjusting its capacity on its domestic routes. Although the African aviation market is usually highlighted as a growth area, the truth is that African air passenger volumes have dropped by 3%. Thus, SAA’s increase is a matter of pride to Bezuidenhout and means that the airline has increased its market share.
Should the Yamoussoukro Decision on air traffic liberalisation across Africa be implemented, it would allow any African carrier to fly to any African market. In a press release, SAA pointed out that it already operates to more than half of the 54 member States of the African Union and that it has a vision of being “Africa’s leading world-class airline”. ‘[T]he airline plans significant growth in Africa in all our major market segments . . . passenger, cargo and technical services,” it stated.
The South African domestic market continued to be weak, growing at just 2%, while capacity available to the market increased by 7%, suggesting an oversupply of 5%. This explains why SAA had capacity available to re-assign to African routes. Adjusting operations to fit the demand allowed the company to increase its load factors on domestic flights to an aggregate figure of 81%.