South African Airways is to be merged with regional operator SA Express and low-cost carrier Mango under a newly-disclosed turnaround strategy for the flag-carrier.
Minister for public enterprises Malusi Gigaba detailed the plan during an address in Cape Town on 10 September.
The plan comes nearly a year after he instructed the board to review South African Airways’ business model in order to steer the carrier away from government financial support towards self-funded growth.
Gigaba says the carrier operates in “highly competitive” markets which are “rapidly liberalising and consolidating, resulting in growing levels of competition”.
He says the creation of the integrated airline group, SAA Group Holdings, will allow the carriers to “better and more effectively” use their assets, improving the efficiency of operations and the allocation of capital.
New network and fleet strategies will be implemented for South African Airways, which will operate as a full-service premium carrier, with SA Express as a feeder and Mango as a low-cost service.
South African Airways, he says, will benefit from the develop of a “whole of state aviation framework”, similar to that found in Kenya and Ethiopia, in which policies regarding airlines, airports, fleet purchases and traffic rights are co-ordinated to exploit local growth.
Gigaba says the ministry is also researching development of a policy compelling government representatives to fly with airlines owned by the state.
His address emphasised the “gravity of the situation” facing the airline as well as its “sensitivity” and “urgency”.
“This strategy provides us a roadmap into the future,” says Gigaba. “We now know where we are going, both in the short term as well as in the medium to long term.
“We understand that change takes time. We must give the [strategy] the time it requires to yield the desired fruits.”
Source: Air Transport Intelligence news