SAA plans to resume flights again in September after a 15-month grounding of its aircraft, with ownership remaining in the government’s hands.
The resumption of flights is pending the conclusion of the due diligence process with the airline’s strategic equity partner.
Discussions between the government and the Takatso Consortium (comprising Global Aviation and Harith General Partners), which is due to hold a majority stake at the airline, are at an advanced stage, according to public enterprises spokesperson Richard Mantu.
The airline last turned a profit in 2011. It has been under the control of its interim management and board after it concluded a tumultuous 17-month business rescue process in April, leaving the company solvent and liquid.
SAA acting CEO Thomas Kgokolo was appointed in April and tasked with overseeing the carrier’s turnaround.
“There is a profound feeling of enthusiasm within Team SAA as we prepare for take off, with one common purpose — to rebuild and sustain a profitable airline that once again takes a leadership role among local, continental and international airlines,” Kgokolo said in a statement on Wednesday.
SAA re-enters the domestic aviation market at a time when passenger demand for airline travel remains subdued and significantly lower than pre-pandemic levels. The International Transport Association (IATA) estimates that the 2019 levels of demands for passenger air travel will return in 2024.
The latest data by the International Air Transport Association shows that domestic demand had plunged by 22.4% vs pre-pandemic levels in June 2019, a slight gain over the 23.7% decline recorded in May 2021 vs the 2019 period.
At the start of its business rescue process, which was aimed at placing the distressed airline on a sound financial standing, the airline operated eight international routes, 18 regional routes and four domestic routes. Its route network, however, will be significantly reduced when it resumes operations on September 23.
Initially, SAA will operate flights from Johannesburg to Cape Town, Accra, Kinshasa, Harare, Lusaka and Maputo. More destinations will be added as operations are ramped up in response to market conditions, Kgokolo says.
The once-premier airline will also have to compete with other airlines such as FlySafair and Airlink, which have capitalised on SAA's demise. Comair, which operates kulula.com and British Airways in SA, is also preparing to take to the skies in September after it grounded its fleet in response to the adjusted level 4 lockdown in June and low demand for air travel.
SAA’s low-cost subsidiary, Mango, halted operations in July and was placed in business rescue in August. Mango has been unable to regain market share since February 2020. As a result, it has been unable to pay its obligations to its creditors, including SAA subsidiary SAA Technical (SAAT), as well as the Airports Company SA.
The status of SAA’s troubled subsidiaries following the Takatso takeover remains unclear.
“The aviation sector is currently going through a testing period, and we are aware of the tough challenges that lie ahead in the coming weeks,” Kgokolo says.
Harith co-founder and Takatso chair Tshepo Mahloele is chair and founder of Lebashe, which owns Business Day and other titles.
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