New Air­link-SAA com­mer­cial deal signed Nine SAA wide-body air­craft are up for sale

Pretoria News - - BUSINESS REPORT | NEWS - [email protected] | Staff Reporter

AFRICA’S largest pri­vately-owned air­line, Air­link, an­nounced yesterday that it had re­placed its fran­chise agree­ment with trou­bled SAA with a new com­mer­cial deal as it seeks to for­tify its business.

This is amidst spec­u­la­tion that the state-owned air­line is fac­ing im­mi­nent liq­ui­da­tion in the ab­sence of the promised Trea­sury fund­ing to keep its op­er­a­tions go­ing.

Air­link will op­er­ate un­der its own “4Z” flight code on ser­vices op­er­ated as from June 11. Cur­rently Air­link uses SAA’s code “SA8”, but it will change to “4Z” in June.

Rodger Fos­ter, a chief ex­ec­u­tive and man­ag­ing di­rec­tor at Air­link, said: “While we in­tend work­ing with SAA’s business res­cue prac­ti­tion­ers to find a solution that en­ables SAA to con­tinue play­ing its im­por­tant role in the South­ern African mar­ket, we have a re­spon­si­bil­ity to take ac­tion to pre­serve Air­link’s vi­a­bil­ity as a fi­nan­cially-ro­bust, in­de­pen­dent and pri­vately-owned air­line.

“How­ever, should SAA’s cir­cum­stance worsen, then Air­link will ac­ti­vate the tran­si­tion sooner, im­me­di­ately, if nec­es­sary.”

Fos­ter said Air­link planned to prop­a­gate its business and take ad­van­tage of new mar­ket op­por­tu­ni­ties.

“At the same time, we will be able to strengthen our vi­tal part­ner­ship with SAA,” Fos­ter said.

Air­link said cus­tomers hold­ing SAA 083 tick­ets for flights af­ter June 10 and who did not want to be re-ac­com­mo­dated, could ap­ply to SAA for a re­fund or through other chan­nels, such as the credit card is­suer used for pay­ment or in­sur­ance and SAA re­funds would be man­aged in line with its business res­cue poli­cies.

SAA was ex­pect­ing to hear from the gov­ern­ment this week­end when R2 bil­lion is ex­pected to be paid to keep op­er­a­tions go­ing. Fi­nance Min­is­ter Tito Mboweni said yesterday that the Na­tional Trea­sury was still try­ing to find ad­di­tional fund­ing for SAA.

Yesterday, Louise Brug­man, a spokesper­son for business-res­cue prac­ti­tion­ers Les Ma­tu­son, said that the gov­ern­ment con­tin­ued to in­di­cate sup­port for the business-res­cue process and “to­gether we were con­sid­er­ing var­i­ous sce­nar­ios to keep the en­tity op­er­a­tional”, ac­cord­ing to Bloomberg.

“We re­main hope­ful that a mech­a­nism can be found to un­lock the liq­uid­ity con­straints,” Brug­man said.

Mean­while the South African Trans­port and Al­lied Work­ers’ Union has lashed out at the gov­ern­ment af­ter the Trea­sury failed to pro­vide R2bn in fund­ing to save SAA.

The union said the gov­ern­ment never in­tended to save SAA in the first place af­ter it was placed un­der business res­cue last month.

“SAA has now put up nine of its air­craft for sale. Eight fly reg­u­larly to ma­jor desti­na­tions around the world. Judg­ing by its ac­tions, the gov­ern­ment never in­tended to save SAA. In an econ­omy where the un­em­ploy­ment rate is the high­est it has been in 11 years, the gov­ern­ment is gam­bling with 10 000 SAA jobs,” the union said.

SAA HAS put some of its air­craft up for sale to ac­com­mo­date the new Air­bus A350-900s the air­line re­cently added to its fleet.

In a ten­der on the air­line’s web­site, SAA said it was sell­ing nine wide­body air­craft – five Air­bus A340-300s and four Air­bus A340-600s – and 15 spare en­gines and four Aux­il­iary Power Units, a de­vice used to pro­vide energy.

Ex­perts said that bought new, the air­craft and high value spare parts would be val­ued at more than R37 bil­lion.

“Af­ter we re­ceived the four new Air­bus A350-900s, it has be­come nec­es­sary for us to sell our older mod­els to ac­com­mo­date the new mod­els with su­pe­rior fea­tures, such as the qui­eter cabin, re­lax­ing in-flight en­vi­ron­ment and more ex­tra-legroom seats in econ­omy class and lie-flat beds in business class,” said Zuks Ra­ma­sia, SAA’s act­ing chief ex­ec­u­tive.

The air­line in­sisted that the de­ci­sion to sell the air­craft had noth­ing to do with the business res­cue process.

“For some time we had planned to re­place our four-en­gined air­craft with the two-en­gined ones,” said Ra­ma­sia.

The ac­tual turn-around time of the sale will de­pend largely on hours flown and a wide range of other fac­tors, in­clud­ing the state of the global econ­omy.

KAREN SANDISON African News Agency (ANA)

AN AIR­LINK plane is parked on the OR Tambo In­ter­na­tional Air­port tar­mac. |

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