Even as Finance Minister Tito Mboweni was revealing that South African Airways (SAA) was talking to potential equity partners about buying a stake in the loss-making airline, the carrier was taking delivery of a new, state-of-the art Airbus A350 passenger jet.
The plane arrived at OR Tambo International Airport yesterday afternoon after a ferry flight from Singapore. It had been there to be repainted into SAA livery from that of its original operator, Hainan, a Chinese airline. The plane, registered locally as ZS-SDC is being leased from Hainan and SAA will also lease two more A350s, probably from Air Mauritius.
The first A350 is being committed to the Johannesburg-New York route where it will replace the Airbus A340-600, which has been in service for more than 15 years.
The A350 is the latest Airbus twin-engine long-haul jet and promises savings of at least 20% on SAA’s fuel bill on the Johannesburg-New York route.
“We welcome the first A350 home on South African soil. The introduction of the A350s offers a new beginning for the airline and will contribute to the airline’s operational efficiencies, and get SAA back on track. It is an important step-change as we continue to make progress to transform our business and return the airline to financial sustainability in the shortest time possible,” says Zuks Ramasia, SAA’s Acting CEO.
The first aircraft arrived amidst much excitement with employees welcoming the new acquisition as the latest arrival to boost SAA’s fleet with modern, fuel-efficient aircraft, which presents a superior customer experience.
The A350 would offer both passengers and crew an improved environment, Ramasia promised.
The A350 has been configured with 246 Economy Class seats, some of which are of a “premium” designation because they offer extra legroom to provide a more comfortable experience, especially on longer flights. The Business Class cabin has flat beds.
SAA is set to receive four Airbus A350-900s over a period of six weeks, and all four are expected to operate commercially by mid-December following regulatory approvals and training. SAA will operate the aircraft for three years.
The first two aircraft are nine months old and previously flew commercially with another carrier. Aircraft number two and three are scheduled for arrival during the first week of November and the fourth aircraft will arrive in early December.
The last two aircraft are brand new and will be delivered to SAA directly from the Airbus factory in Toulouse, France. These two aircraft are sub-leased from Air Mauritius and will also fly with SAA for three years.
SAA will also benefit from the approximately 40% lower cost for maintaining the A350-900 XWB’s airframe over a 5-year period, that is, the aircraft excluding the engines, compared with some of its four-engine aircraft generation it will replace on the Johannesburg-New York-Johannesburg and other routes.
“With this we extend our relationship with Rolls-Royce and the Trent family of engines by adding the Trent XWB to a fleet that already includes the Trent 700, powering the Airbus A330s,” says Ramasia.
During his medium-term budget speech in parliament on Wednesday, Mboweni said SAA was “unlikely ever to generate sufficient cash flow to sustain operations in its current configuration”.
He went on: “Which then begs the question: How long are we going to be on this flight path? Forever? I think not. Operational and governance interventions are required urgently!”
He said he was “pleased to learn that there are conversations involving SAA and potential equity partners, which would liberate the fiscus from this SAA sword of Damocles”.
Leasing aircraft – even by major world airlines – has become a more prominent aircraft financing option, especially over the past decade. It enables cash-strapped organisations like SAA to maintain a good cash flow situation without having to increase debt to buy and own its fleet outright.
SAA’s current passenger fleet is dominated by Airbus aircraft, while its subsidiary Mango operates Boeing 737s passed on from SAA.