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Published on : Saturday, July 18, 2015
South African Airways (SAA) continues to drive implementation of its Long-Term Turnaround Strategy across the business. While commercially the airline has adjusted capacity against declining demand, 81% aggregate load factors marked the first quarter of the 2015/16 fiscal. The business has reduced operating costs by 14% and by beginning August SAA would have introduced two new commercially viable routes (Johannesburg Abu Dhabi in March and Accra Washington on 2 August) while the positive impact of improvement opportunities and efficiencies in its network should realise a positive impact of R 2,5 billion in annualized earnings.
SAA remains in full Long-Term Turnaround Strategy (LTTS) implementation mode. “Across both our commercial and operational areas there is a clear focus on delivery against the objectives of the plan,” says SAA Acting CEO Nico Bezuidenhout. “Operationally, SAA has been ranked amongst the best airlines in the world that operate in excess of 10 000 flights monthly for its on-time performance since March this year. In June, the airline was ranked fourth globally.” It is efficiencies such as its improved on-time performance that has afforded some of the first tangible results of tactical implementation of the LTTS. The business is also commercially energized, with a particular focus on Africa.
“SAA has already increased frequencies to key African destinations such as Mozambique, Democratic Republic of Congo and Mauritius among others,” says SAA Acting CEO Nico Bezuidenhout. “The positive commercial impact of a demand-side response not only indicates that there are positive gains to be made through network efficiencies but, that sound commercial decision making will benefit the business in the medium to long term.” He adds that Africa remains a key focus area for SAA. “Aviation has the potential to impact the continental economy similar to the mobile telephony revolution of the early 2000s. Africa’s economic growth has been relatively stable over the past decade and, with consistent market liberalization and national governance improvements, confidence in Africa’s great potential and positive sentiment continues to grow.”
Aviation has the potential to make an important contribution to the further economic development and growth in Africa. “It connects countries, markets and facilitates trade and connects Africa to global supply chain links.” As far back as 2011 an Airbus forecast pegged annual air traffic growth of 6.5% annually for Africa leading up to 2020. “And SAA plans to be a leading and very active role player in this market.”
SAA will launch its third inter-continental route outside of South Africa, with passengers accepted from other markets, on 2 August 2015 when its inaugural flight between Accra (Ghana) and Washington DC takes to the skies. SAA already operates a regional service between Accra and Abidjan (Cote D’Ivoire) as well as a three times weekly service between Dakar (Senegal) and Washington DC.