HILKA BIRNS / CAPE TOWN
South African flag carrier in 41 aircraft order worth $3.5 billion to replace entire regional, domestic and long-haul fleet
South African Airways (SAA) has chosen Airbus over Boeing for its massive fleet renewal order, with a deal worth $3.5 billion for 41 aircraft. The airline will acquire 26 A319/A320s and 15 A340-300/600s, with deliveries from later this year to 2012 to replace its entire regional, domestic and long-haul fleets.
The key element of the deal is the acquisition of nine Rolls-Royce Trent 500-powered A340-600s and three CFM International CFM56-powered A340-300 Enhanced models which will replace the airline's ageing fleet of 14 Boeing 747 Classics and two Boeing 767s on its long-haul services.
SAA will take the first three A340-600s in the last quarter of this year and a further four next year. Six of these airframes, which had previously been allocated to Swissair and became available following the airline's financial collapse, are being purchased and one leased. Two more -600s will be taken on lease in 2005-6 from an undisclosed source.
The airline is also leasing six A340-300 Enhanced versions - three each in the first quarter of 2004 and the first quarter of 2005 - making SAA the first customer to declare a commitment for the new model. This variant, which will begin flight-testing next year, features upgraded CFM56-5C/P engines for improved performance. In the interim, SAA will lease six A340-200s from Lufthansa as soon as possible until 2004, when they will be replaced by the new A340-300s.
SAA says the new long-haul fleet will be used to start non-stop services to Copenhagen, Japan, Manchester, New York, Milan Malpensa, Munich and Sydney. SAA's 747-400s will be replaced on Atlanta and New York services by the A340-600 by 2008.
The short-haul component of the deal comprises 11 A319s which will be taken on lease in 2005 and 15 A320s, to be acquired between 2010 and 2012, either on lease or through a purchase. The A319s will replace SAA's 22 Boeing 737-200s as their leases expire, while the A320s will replace the airline's relatively new fleet of 16 737-800s from 2010. The latter were acquired in 2000 by former chief executive Coleman Andrews at a cost of R4.5 billion ($398 million), but were plagued by implementation problems that cost the airline R152 million last year. SAA chief financial officer Richard Forson says SAA will honour an outstanding order for five 737-800s.
Airbus and Boeing went head to head for the SAA deal, and the airline's president Andr‚ Viljoen says Airbus was chosen because it offered the most cost effective solution in terms of operations, maintenance and fuel efficiency. "The new fleet will give us flexibility to deploy it on most of our network and routes...it also gives SAA 10% more seat capacity," he says.
South Africa's statutory industrial participation policy requires that Airbus will have to re-invest 30% of the contract value in South Africa over a period of seven years. Forson says Boeing will be held to its offset commitments relating to the 737-800 deal.
Source: Flight International
