SAA needs aircraft but can’t buy or lease them

Embattled South African Airways this week returned four more leased airplanes, leaving it with only five to use, and with questions about its ability to continue operations.

SAA initially returned 17 aircraft in mid-June, followed by a second batch of 14 this month to countries in Europe. This left SAA with only nine aircraft and with this week’s return of four more, it has only five planes to run its business with.

Three Airbus A319s and one A330-300 are being stored in South Africa. In terms of the rescue plan, the airline will require six aircraft when restarting operations, fin24 reports.

When SAA went into business rescue in December last year, its fleet consisted of nine owned aircraft and 40 leased ones.

However, the airline’s business rescue practitioners decided to get all agreements to lease planes terminated by the end of July.

The return of the most recent batch of planes was because the lessors had elected to initiate the termination of the leases, the rescue practitioners said.

The nine aircraft owned by SAA – five A340-300s and four A340-600s – which have been for sale since January, have still not attracted buyers and are unlikely to. The reasons for this are that the market globally is in the doldrums and nobody wants to buy new aircraft, said aviation expert Linden Birns, managing director of Plane Talking.

But if SAA needs six aircraft to operate, in terms of the rescue plan, the question remains of where it get them from?

Although it should be possible to get cheaper lease rates than before the Covid-19 pandemic, there are problems as far as SA is concerned, according to Birns.

How would SAA pay for the leased planes as government has refused a further bailout in terms of the rescue plan and the department of public enterprises and Treasury only gave a commitment to “mobilise” funding for the rescue plan?