HILKA BIRNS / CAPE TOWN
South African government is now 100% owner following repurchase of 20% stake formerly owned by Swissair
The South African government is evaluating restructuring options for South African Airways (SAA) following its repurchase of a 20% stake from the collapsed Swissair Group. The move comes as SAA is about to make a decision on its long-haul fleet plans.
The government last week finalised a bargain deal for the carrier, paying just R382.5 million ($34 million). The Swissair Group paid R1.4 billion in 1999 for the share, with an option on a further 10%. South Africa's public enterprise minister Jeff Radebe says the price was determined by volatile market conditions. The sale means SAA parent parastatal Transnet once again retains full control.
The re-acquisition is a setback for the government's privatisation programme, but Radebe says a multi-departmental task team is researching restructuring options for SAA. "The ownership of 100% of the share capital will facilitate and expedite this process," he says.
Meanwhile, Airbus and Boeing were in Johannesburg last week demonstrating the hot and high performance of the A340-600 and 777-200ER respectively, in a bid to clinch a potential $1.5 billion long-haul fleet deal from the carrier. SAA is again looking to replace its ageing widebody fleet of two Boeing 767s and 14 Boeing 747 Classics - five -200s, six -300s and three SPs.
SAA's evaluating committee was due to make its recommendation to the board on 17 February. Any aircraft acquisition would need to be approved by Transnet and the South African government.
SAA's chief financial officer Richard Forson says the airline is considering twin- and four-engined options within the A330/A340 family and the twin-engined 777 family. The decision will be driven by the best deal linked to performance, cost, freight capacity and SAA's current and future business, he adds.
One of the options being considered is leasing two Rolls-Royce Trent 800-powered Delta Air Lines 777-200ERs and purchasing a third from the carrier, according to Flight International's sister on-line service Air Transport Intelligence. Delta flew one of its seven 777s to Johannesburg for the demonstrations.
Forson says very competitive deals have been put forward by both manufacturers and the airline is in a favourable buying position given the current market conditions. The deal is likely to be a mixture of lease and lease-purchase, he says, adding that SAA has been talking to leasing companies International Lease Finance and GE Capital Aviation Services.
Source: Flight International