South Africa’s new airline could launch in January 2021 – BusinessTech

South Africa’s new airline could launch in January 2021 – BusinessTech

South Africa’s new national airline could launch as early as January 2021, the Sunday Times reports.

The government is working with private sector investors for a restructured South African Airways (SAA) – and has received “more than 10 unsolicited offers” to partner with the airline, the paper said.

These interested investors are also exploring potential integrations of SAA and its subsidiaries, including SAA Technical and Mango.

Bloomberg reported this week, that the government has started talks with private entities interested in buying SAA, which needs at least R10 billion to resume operations.

A team from the Department of Public Enterprises and advisers from Rand Merchant Bank began negotiations after receiving four promising proposals regarding SAA, according to Kgathatso Tlhakudi, the Department of Public Enterprises’ (DPE) director general.

The state ideally wants SAA to resume operations by the year-end, he said in an interview on Wednesday, although much will depend on a pick up in demand amid the Covid-19 pandemic and a successful fundraising, Bloomberg said.

While Tlhakudi declined to identify SAA’s suitors, the government has said previously that approaches have been made by private-equity firms and potential aviation partners.

Ethiopian Airlines Group, Africa’s largest and only consistently profitable carrier, has previously said it also may be interested in investing in SAA.

SAA has been in administration since December and hasn’t flown a commercial passenger flight since March, when South Africa’s borders were closed to help contain the coronavirus.

Retrenchments

Voluntary severance packages have been offered to employees in a bid to bring staff numbers down, and only 1,000 employees will remain to start the new airline.

This will see 2,700 SAA staff lose their jobs, including a large number of its pilots.

As part of the restructuring, SAA’s current complement of 625 pilots will be cut to 88.

It has also been reported that equal employment metrics will be more important than seniority for determining which pilots will be retained at the new SAA.

This is to address concerns from sectors players that the majority of pilots and cabin crew in the local aviation sector are white.

New look airline

The DPE has said that the new SAA will be run in a professional and sustainable manner to support key economic sectors, including tourism and solidify South Africa as an African gateway to international markets.

The DPE said that it would like to see the following characteristics at the new airline:

  • An efficient and modern aircraft fleet with hybrid density options acquired at competitive rates resulting in cost efficiency;
  • An offering with the right routes, at the right times and at competitive prices;
  • A network structure that allows for connectivity at hubs, whilst maintaining elevated aircraft utilisation;
  • Connecting Africa to world economic hubs whilst maintaining diplomatic connectivity;
  • A right-sized and motivated workforce; and
  • A customer-centric airline designed to be lean, technology savvy, digitally native and agile to service all market segments.

Read: This is what the ‘new SAA’ will look like

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