A year since the taking the reins at South African Airways, it is probably safe to say that the one thing chief executive Vuyani Jarana needs most of all right now is more time.

For the past 12 months Jarana has had the unenviable task of reversing the damage caused by years of heavy financial losses, rising competition both domestically and abroad, management and boardroom turmoil, and political interference, as he seeks to return the carrier to break-even by 2020.

Speaking to FlightGlobal at the IATA AGM in Sydney earlier this year, Jarana said that a "big part" of achieving the carrier's current five-year turnaround plan was to ensure the Johannesburg-based carrier had the necessary funding to put it into action.

In October, South Africa's treasury earmarked a further R5 billion ($349 million) to help SAA settle maturing debt over the next six months, which the airline will wish to use to renegotiate debts with its major creditors.

The further bailout re-ignited the debate in South Africa of tax-payer money being used to keep the carrier afloat, even prompting the country's new finance minister Tito Mboweni at the start of November to suggest the carrier should be shut down.

The country's President Cyril Ramaphosa and public enterprises minister Pravin Gordhan subsequently played down such suggestions, the former noting that as guarantor of the SAA debts, these would simply fall on the state instead. They argue restructuring the carrier to secure a strategic investor is the best path for the airline.

Such has been the debate, that SAA issued a statement on 11 November noting there has been no change in the government's position and it continues to work on its restructuring.

The episode, though, serves as a reminder of the precarious state SAA finds itself in and the public spotlight the carrier finds itself in.


All three ministers are relatively new to their current positions. Gordhan, a former finance minister himself, took the public enterprises position in the cabinet established by Ramaphosa, when he became president in February. Mboweni became finance minister in October. But the challenges involved in reviving debt-laden SAA are all too familiar.

But following the challenges of recent years, during which the carrier has worked through a string chief executives, there does seem renewed appetite to address SAA's long-term problems. But achieving positive solution to SAA requires a transformation of its fortunes.

The issues blighting SAA over the years have been well-known. A string of airline chiefs, many of them in an acting capacity, have embarked on restructuring efforts and strategic shifts over the years. These though have failed to be fully implemented, amid boardroom and political wrangling. All the while rising competition - both within African markets and notably from global carriers on international routes - has heaped further pressure on the carrier.

"It is very difficult when good people are working for a very depressed organisation, so good people begin to lose faith," Jarana told FlightGlobal in June. "You get a sense that people are bit cynical about change, is it going to happen; the CEOs come in, they last for a couple of months, then they go. [And employees] haven't seen any major decisions [implemented].

"We've shown, unequivocally, that we are here to do business. You are starting to see employees being involved in the change programme," he added.

Jarana, and his team which includes Peter Davies as chief restructuring officer, is now a year into the mission. Under his leadership SAA has been working on a "last financial solution" to its capital needs after some encouraging improvements in performance. It said turnaround initiatives to improve revenue and rationalise its network helped it to achieve an "encouraging positive financial performance" in its first quarter and that routes were delivering positive gross-profit margins for the first time in more than a decade.

In its clarifying statement SAA says: "There are ‘green shoots’ that indicate positive results on initiatives already implemented, particularly in the airline’s route network. This follows the implementation of capacity adjustment in the domestic market and network optimisation in the regional and international markets.

Even before Jarana took over in November 2017, SAA had begun implementing its turnaround plan. From September that year it took action to exit from unprofitable routes, in some cases shifting capacity to airline partners such as Airlink.

FlightGlobal schedules data shows that SAA has cut its flights to Liberville, and the connecting legs to Cotonou and Douala, as well as domestic flights to Pretoria and Sun City in the last 12 months..

Elsewhere, the airline has trimmed capacity. Of the 72 destinations that SAA serves, the airline has reduced capacity on two-thirds of its routes. It has increased seat capacity on only 20 - and kept it unchanged on four others.

SAA has reduced its own operations on key the big domestic routes linking Johannesburg with Cape Town by a third, ceasing its A340-600-operated service on the route, and halving seat capacity to Durban. Some of that capacity has been switched to its low-cost unit Mango Airlines.

On international services, SAA has cut seat capacity to Munich by a fifth, and to London Heathrow by a third.

Overall the airline will operate 867,307 seats in November, down almost 18% on the same month last year. That includes services operated on its behalf by Airlink and SA Express.


Flight Fleets Analyzer data indicates that the size of SAA's fleet has changed little over the last four years.

In 2014 the airline had a fleet of 53 aircraft. Today the fleet stands at 51. Within the fleet make-up there have been two noticeable changes. The number of Boeing aircraft has fallen from a dozen 737s in 2014 to just three. There has also been a move towards a greater share of widebodies within the fleet.

Four years ago the total number of A330 or A340 aircraft in the fleet numbered 23. This has risen to 28, reflecting the delivery of five A330s - aircraft it took to replace a long-dormant commitment for 10 A320s.

SAA fleet

The airline has no aircraft on order or on option. Its average fleet age is just over 12 years, with its A340 fleet being between 13 and 16 years old. The youngest aircraft in SAA's fleet are the five A330-300s it took delivery from 2016 onwards.

The South African flag carrier has also redeployed a number of widebody aircraft onto medium haul routes. Earlier this year it began serving the Mauritius market with a mixture of A330s and A340s.


Beyond the job of turning around SAA's mainline business, the continued uncertainty around the future shape of state-owned regional carrier SA Express and SAA's low-cost carrier Mango will be taxing Jarana's attention.

The South African government has repeatedly floated the idea that all three carriers should be merged into one unit, possibly as a precursor to the privatisation of the SAA group. To date this merger has not occurred. If anything the problems at SA Express may even be worse than those at SAA.

The carrier only resumed flights in August after being grounded by the country's regulators over the summer following a safety audit. It too required further capital support from the government In October.

As Jarana begins his second year at the head of SAA he will be looking for patience from his political masters to provide more evidence that the carrier is achieving meaningful reforms.

Peter Morris, chief economist at Flight Ascend Consultancy says that SAA will "not have been helped much" by the economic conditions in South Africa at present, given the persistent weakness of national currency the Rand. Morris says there was a real need for fleet renewal and streamlining at SAA a few years ago, but adds that "all that takes money".

In its statement of 11 November, SAA acknowledges "there is more work to be done" to implement the strategy.

"We are encouraged by the progress we are making to turn the company around," it says. "The airline’s position is that it will take three years to bring the company to a break-even position. However, on the strength of the airline’s current interventions, as well as monitoring how these are implemented, the shareholder decided to provide part of required financial assistance to the airline.

"There is every resolve to address long-standing legacy issues, to improve the performance of the business, to regain its market share and to provide its customers continued and improved service," the airline says.

Additional reporting Graham Dunn

Source: Cirium Dashboard