SAA aircraft lease costs increase 11%

TROUBLED SAA has announced an 11 percent increase in aircraft lease costs from R2.8 billion to R3.1bn for the 2016 financial year.

Although SAA did not state whether it leased any aircraft to Mango at discounted prices it said two were offered to the low cost carrier during the 2015 financial year.

“Aircraft lease costs have increased by 11 percent from R2.5bn in the previous financial year to R2.8bn in the current financial year, primarily due to the impact of the weaker rand and the six additional A320 aircraft that were delivered during the financial year, as well as the full annual impact of the four A320 aircraft that were delivered in the previous financial year,” said SAA.

In June, opposition parties and low-cost airlines called for a full-scale inquiry by the Competition Commission on anti-competitive behaviour after SAA said it had subsidised Mango.

SAA and former Mango chief executive Nico Bezuidenhout, who had just resigned to join competitor FastJet, denied the claim of discounted prices to Mango.

Mango had been one of the performing airlines in its 10 years of existence and had increased its market share in the domestic industry.

The airline said that in the 2015 financial year maintenance costs increased 32 percent to R3.4bn.

“The majority of these costs are contract driven and, once again, impacted by the weaker rand,” it said.

“In addition the group’s fleet increased by two aircraft, accordingly impacting maintenance provisions for the year,” it said.

Mango’s fleet is at 10 aircraft while SAA a total fleet of 48 aircraft.