SAA is stuck in a bygone era

Somehow, South African Airways (SAA) keeps flying. Until the delivery of another two short-haul aircraft from lessors in September and October, it had a fleet of just seven aircraft.

By December, it will have nine and its ambitious restart plan reportedly sees the overall fleet doubling by early next year (presumably from the original base).

A year before the pandemic, it had as many as 46 passenger aircraft.

The bailouts, we are told, are over.

In the last three years, National Treasury says a total of R16.4 billion was spent settling the airline’s debt and interest. The final tranche of this debt was repaid in July. Many more billions were allocated to the implementation of its business plan.

It is stuck with a fleet that’s not only too small, but simply not fit for purpose.

These are old planes. Four of its current operating fleet – the three A319s and its four-engined A340-300 – are each nearly 18 years old. These older planes are definitely showing their age (it’s likely these are the only planes lessors were willing to provide to the airline when it ‘restarted’).

Ancient

Stepping on board is like travelling back in time.

It’s not just the huge ancient seats and the colour scheme (brown, brown and brown). It’s not just the muzak (‘Quando Quando Quando’, seriously).

It’s not just the full bar service in business class (think trolley with full 750ml bottles).

It’s not just the fact that the senior cabin attendants refer to themselves as ‘pursers’ …

In the announcements before take-off, the purser rattles off a long list of languages that the onboard crew are “conversant in”. Passengers are reminded to only use lavatories in their “respective class of travel”.

Plus, there’s the ridiculous theatre of the drawn curtain between business and economy classes (never mind that it’s barely hanging onto its rail anymore).

Its evening flights still offer full warm meals, made by subsidiary Air Chefs, which is absurd for a two-hour journey. The printed plastic cutlery wrapper remains decorated with a long list of destination airport codes that SAA once flew to … London Heathrow (LHR), Hong Kong (HKG), Atlanta (ATL).

This is a marginal operator pretending that it’s a sprawling global airline. Practically every single thing is still done the way it was done 20 years ago.

Routes

At the moment, the airline operates somewhere between 16 and 17 return flights a day (this has been ramping up). Seven of those are between Johannesburg and Cape Town and a further six are between Joburg and Durban.

To put this into context, FlySafair currently flies 16 times a day (return) between OR Tambo and Cape Town alone (and a further four return flights from Lanseria).

Staff efficiencies are questionable, given the scale of this reduced schedule.

It must surely be profitable at this point (and the fact that lessors are willing to lease more planes – newer ones – does point to this).

It would take a serious effort to be losing money, especially where capacity constraints on domestic and regional routes mean airlines don’t have to compete on price.

The fundamental question, which it (and the Takatso Consortium) has not really answered is whether it needs (or wants) to be a full-service, dual-class airline in the domestic market

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The failed Comair rescue plan was almost entirely premised on the lucrative British Airways licence, where it operated flights under that brand in the region. But in that scenario, the substantial volume of inbound tourists basically guaranteed seats on many local flights.

What is SAA’s proposition, given that its long-haul business doesn’t exist?

Describing its future long-haul strategy as ‘muddled’ would be kind.

The current plan is for it to launch routes from Cape Town to New York, São Paulo and at least one Australian city. It also plans to restart its Johannesburg-Washington (via Accra) and Joburg to Perth routes. It is understood that these two were among its most successful (and profitable).

The previous strategy of using OR Tambo as its hub, with its connecting routes to domestic and regional destinations, has ostensibly been abandoned.

International tourists want to visit Cape Town, something Wesgro realised almost a decade ago when it launched Cape Town Air Access. Once Delta’s Atlanta-Cape Town service begins in December, there will be two US airlines operating flights to three destinations (United flies to Washington and Newark).

SAA will actually have to compete for passengers by the time it launches that route.

Could the larger foreign carriers – who continue to add capacity to Joburg and Cape Town – have mopped up much of the demand? This leaves SAA to try make a run of routes such as Joburg-Perth (even though Qantas started this route this month) and Cape Town-São Paulo (LATAM will fly from Brazil to Joburg from July next year).

FlySafair and Airlink are steadily seizing opportunities to regional destinations like Victoria Falls, Windhoek and Mauritius.

Quite what Takatso’s plan for SAA is remains a mystery. The protracted sale of 51% of the airline, first announced in June last year, will be finalised by March (hopefully).

At the pace that SAA restarts, there’s a real risk it misses many (or all) of these long-haul and regional opportunities.

There’s nothing ‘wrong’ with the experience of travelling on SAA, save for it feeling completely outdated. And the lack of a clear, modern proposition in a crowded market, which is increasingly the case domestically and on popular/lucrative long-haul routes, may simply not be good enough.

This article originally appeared on Moneyweb and was republished with permission.
Read the original article here.