More route closures, more financial losses
Cash-strapped SAA could post losses on its international routes for a fifth year in a row when it announces its financial results this year after it cancelled the unprofitable route between Johannesburg and Abu Dhabi.
The suspension of the Abu Dhabi route came only 11 months after SAA introduced it, and follows the airline’s R1.6 billion loss incurred on its international routes in 2014.
SAA spokesperson Tlali Tlali would not speculate on how the financials would look, but indicated that there was no other international route that the airline wanted to close.
The state-owned airline made the section 54 application to National Treasury, which approved the cancellation of the Abu Dhabi route.
However, Tlali said that SAA constantly assessed all routes to ensure profitability.
“SAA is profitable on the domestic and regional segments of our global route network. It is only the international routes that are proving to be a challenge to us. We are looking at a number of options to cure the situation.
“Some of the interventions we have in mind are of a sensitive nature and, if we were to disclose them prematurely, they could easily give our competitors an edge over us,” said Tlali.
Last year, SAA canned its nonstop services to Beijing and Mumbai due to heavy losses.
The Beijing route made a loss of R1 billion from when it was introduced in 2012 until it was cancelled last year, and accounted for 21% of the losses arising from international operations.
The only SAA international routes that made a profit in 2014 were Frankfurt, Munich and Perth.
From 2011 to 2014, SAA made an accumulated loss of R4.4 billion.
Tlali said SAA would continue with its route performance assessments to identify new opportunities and cease lossmaking operations.