South African flag carrier is also seeking offers from Airbus and Boeing for more short route aircraft

South African Airways (SAA) is seeking highly competitive bids from Airbus and Boeing for its long haul fleet renewal which could also incorporate the carrier's short haul requirements if the right deal is put on the table.

The South African carrier met the manufacturers last week to discuss requirements to replace its ageing fleet of 13 Boeing 747 Classics (five -200s, six -300s, and two SPs), with the Airbus A330/ A340 and Boeing 777 seen as the prime candidates. The two manufacturers have until mid-October to provide best and final offers, which SAA chief executive André Viljoen wants to present to his board by mid-November.

The move is seen by Viljoen as a key step in restoring the airline's profitability. It has just announced a record R735m ($91.8 million) loss for the year ending March 2001 and is bleeding millions of rand after the US terror attacks.

The airline is midway through the renewal of its short/medium haul fleet which began last year with the arrival of the first of 20 Boeing 737-800s. However it still has 20 737-200s in service and is seeking additional new or young secondhand medium capacity aircraft for services on routes to East and West Africa and Cape Town. The A320 family, which was dropped in favour of the 737-800 last year, is apparently back in contention for this requirement.

Following the South African Government's decision to postpone SAA's public listing, the airline plans to self-fund its fleet renewal. "We're prepared to look at a total or a partial deal. It depends on the economics and the practicalities of the whole deal," says Viljoen. "If we get a deal that means we can do nothing for five years, we're not going to go for it. I need to restore my competitiveness now."

The suicide hijackings have cost SAA R16m ($2 million) in flight cancellations and a further R6m because of dwindling passenger numbers on its New York and Atlanta routes, which last year contributed R1.8 billion to its R10.8 billion turnover. It has frozen all new employment and a task force is evaluating the impact of the attacks.

Viljoen's strategy to turn around SAA includes reducing costs by R600 million, revamping customer service, sustaining revenue growth, optimise alliances, implementing an Africa strategy, improving operating efficiencies, managing currency/fuel exposure and developing his staff.

Source: Flight International