South African Airways (SAA) is in the final stages of renegotiating a contract with aircraft manufacturer Airbus to lease five new A330 aircraft instead of purchasing 10 A320 aircraft as part of the original deal to purchase 20 that it negotiated in 2009‚ it said on Monday.
The wide-bodied A330 planes would be used for regional and Abu Dhabi routes.
The state-owned carrier expects the new deal to save it R1.4-billion on predelivery payments as well as R1.4-billion on impairments that would have been recorded had it bought the 10 aircraft it was originally scheduled to receive.
SAA had already received 10 A320s in the past 18 months and it had to record impairments of another R1.4-billion upon receipt of 10 A320s it has taken delivery of.
This is due to a newer model‚ the A320 Neo‚ coming in and lowering the market value of the A320s SAA was contracted to buy from Airbus in the deal.
SAA recorded over R1-billion in fleet impairments in its financial results for the year ended March last year on older aircraft and some of the A320s it had taken delivery of.
The new A330 aircraft would be cheaper to lease than to purchase the 10 A320 which are an older model‚ the airline said.
SAA‚ which has cut flights to Beijing and Mumbai‚ said it was looking to reconfigure its loss-making Washington route and was looking at a stop-over destination in another West African country instead of Dakar in Senegal.
The new stop-over would have higher traffic volumes to perform a “feed and defeed” role for North American services‚ SAA acting chief executive Nico Bezuidenhout said.
The reconfiguration would go “hand-in-hand” with plans to establish a West African hub‚ which the airline was working on.
Bezuidenhout said the airline was waiting for bilaterals to be signed with a West African country that had the traffic to make the “feed and defeed” destination for the Washington route sustainable.
He would not disclose the name of the country.
He said SAA had restructured its offices in Dakar and frequencies to the country would drop resulting in R200-million savings for SAA.
On Monday, Bezuidenhout was presenting to the media an update of a 90-day action plan‚ announced last year.
It aims to get SAA back on track and achieve the goals set in its long-term turnaround strategy (LTTS).
Last week the plan had reached 60 days and Bezuidenhout said the airline was on track to achieve the R1.25-billion earning before interest‚ tax‚ depreciation and amortisation (ebitda) savings it had promised as part of the short-term plan by March 21.
SAA was “revalidating” its LTTS‚ drawn up two years ago‚ and the airline would submit a new reconfigured network plan to the Treasury‚ which it reports to‚ by the end of this month.
The plan would provide information on the airline’s future fleet investment strategy.
However‚ Bezuidenhout said there would be no more major route changes in the short term.
SAA had extended its lease contracts for eight of its A340’s by “no more than six years”.
He said it had received shareholder approval for three of the aircraft and was “fully confident” it would get approval for the remaining five. — BDLive
Leasing strategy to save SAA R1bn
The wide-bodied A330 planes would be used for regional and Abu Dhabi routes.
The state-owned carrier expects the new deal to save it R1.4-billion on predelivery payments as well as R1.4-billion on impairments that would have been recorded had it bought the 10 aircraft it was originally scheduled to receive.
SAA had already received 10 A320s in the past 18 months and it had to record impairments of another R1.4-billion upon receipt of 10 A320s it has taken delivery of.
This is due to a newer model‚ the A320 Neo‚ coming in and lowering the market value of the A320s SAA was contracted to buy from Airbus in the deal.
SAA recorded over R1-billion in fleet impairments in its financial results for the year ended March last year on older aircraft and some of the A320s it had taken delivery of.
The new A330 aircraft would be cheaper to lease than to purchase the 10 A320 which are an older model‚ the airline said.
SAA‚ which has cut flights to Beijing and Mumbai‚ said it was looking to reconfigure its loss-making Washington route and was looking at a stop-over destination in another West African country instead of Dakar in Senegal.
The new stop-over would have higher traffic volumes to perform a “feed and defeed” role for North American services‚ SAA acting chief executive Nico Bezuidenhout said.
The reconfiguration would go “hand-in-hand” with plans to establish a West African hub‚ which the airline was working on.
Bezuidenhout said the airline was waiting for bilaterals to be signed with a West African country that had the traffic to make the “feed and defeed” destination for the Washington route sustainable.
He would not disclose the name of the country.
He said SAA had restructured its offices in Dakar and frequencies to the country would drop resulting in R200-million savings for SAA.
On Monday, Bezuidenhout was presenting to the media an update of a 90-day action plan‚ announced last year.
It aims to get SAA back on track and achieve the goals set in its long-term turnaround strategy (LTTS).
Last week the plan had reached 60 days and Bezuidenhout said the airline was on track to achieve the R1.25-billion earning before interest‚ tax‚ depreciation and amortisation (ebitda) savings it had promised as part of the short-term plan by March 21.
SAA was “revalidating” its LTTS‚ drawn up two years ago‚ and the airline would submit a new reconfigured network plan to the Treasury‚ which it reports to‚ by the end of this month.
The plan would provide information on the airline’s future fleet investment strategy.
However‚ Bezuidenhout said there would be no more major route changes in the short term.
SAA had extended its lease contracts for eight of its A340’s by “no more than six years”.
He said it had received shareholder approval for three of the aircraft and was “fully confident” it would get approval for the remaining five. — BDLive
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