SAA domestic flights to resume ‘soon’

In a statement released late last night, the South African Airways (SAA) version 2.0 says that it is preparing to resume operations soon.

According to Interim Chief Executive Officer, Thomas Kgokolo, SAA, now out of business rescue, will take to the skies again in July, or at the latest early to mid-August.

While an on-sale date and exact resumption of operations remains unclear, the statement indicates that the carrier will at first focus on domestic operations and limited regional services.

No firm commitment on any international operations was shared.

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“The plan is to focus initially on profitable local and regional routes and the lucrative Johannesburg-Cape run will most likely be among the first on a new and slimmed down timetable.”

There are presently five other airlines servicing the route, with recent comments from carriers like FlySafair and Airlink indicating a market already plagued by the over supply of capacity.

Comair recently added more capacity when it reopened flights between Lanseria and Cape Town.

SAA’s statement did not indicate what scheduling it would add to the route or any other network points. The business rescue practitioner exited SAA at the end of April.

But in April, FlySafair’s Kirby Gordon said to The Citizen that “There’s always the supply-demand imperative at play. We are certainly in a situation where supply exceeds demand, but we are not in a position where, compared to historical values, there are far more seats in the market than ever before.

“We are however in a situation where there is much lower demand. So yes, the market is flooded with inventory and will be for some time.

“There’s inventory that is published out there and excess supply does make it tough to get any sort of reasonable price point, but there is also a degree of  “Latent supply” by way of underutilised aircraft and crew which could yet still be pumped into the market.

“At the end of the day, this supply capability is either going to have to contract with airlines scaling down or a player bowing out, or we are going to have to ride this out until demand improves.”

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SAA will receive R 10.5 billion, of which R 2.7 billion is earmarked to bail out its subsidiaries and the balance to settle retrenchments and start up SAA 2.0.

In his medium-term budget statement last year, Finance Minister Tito Mboweni said that the funding for SAA was harvested through “reductions to the baselines of national departments, public entities and conditional grants.”

SAA’s statement adds that “Kgokolo says momentum is starting to build quickly at SAA with a view to resuming full domestic and regional operations within weeks. Details on precise date and when booking opens will be provided as soon as possible.”

It continues, saying that “Kgokolo says he would like to give more clarity on an exact take-off date, but the process is contingent on ongoing negotiations with pilots regarding their severance packages. He describes this process as positive, and that regular engagement is taking place.

“Work is still being completed with other staff unions on departure agreements which will see the new SAA employing about a thousand people.”

The statement has also provided clarity on when an international service will resume.

It reads that it could take up to two years, as the carrier’s new management team has limited operating capital, and that a strategic decision has been taken to focus initially on local and regional operations.