South African Airways switches A320 order to A330s

South African Airways (SAA) is in the final stages of swapping out an existing order for 10 Airbus A320s for five A330s. It is also eyeing the second-hand, long-haul aircraft market.
                                                                       
“We re-negotiated this contract with Airbus,” CEO Nico Bezuidenhout told ATW before the opening of the IATA AGM in Miami. “The additional A330s are suitable for our Mid-African network.

Including our existing six Airbus A330-200s, that gives us 11 A330s for our long-haul fleet,” he said.

“The five additional A330s are expected to be delivered in 2016 and in the first quarter of 2017 [excluding January],” Bezuidenhout said.

In addition, the Star Alliance member has nine A340-600s and six A340-300s in its long-haul fleet.

South African Airways Airbus A340-313 (c/n 197) ZS-SXH arrives at London - Heathrow (LHR/EGLL) on January 16, 2012.

(Photo by Terry Wade)

Bezuidenhout said current oil prices are making these four-engined Airbus widebodies more economical to fly.

In February, SAA renegotiated lease re-extensions on three A340s and is working on similar deals for another five, which is expected to cut R262 million ($22.5 million) in annual costs.

Following its current stabilization program, the carrier also plans to do a market review of available options for its future long-haul fleet to replace the A340s.

However, Bezuidenhout said the focus will be based not on new-generation types such as the Boeing 787 or Airbus A350, but on the “second-hand market” in the short term. “The number of those aircraft would be 10 units,” he said, which could include types like the 777, for example.

“In terms of restructuring the company, a lot of effort went into the business over the last 120 days to stabilize SAA from a commercial standpoint,” he said, adding it axed potential loss-making routes from Johannesburg to Beijing and Mumbai. “Last April, our performance was 45% better compared to the April last year. We are see benefits are coming in.”

After stabilization, SAA is looking to an aggressive expansion plan within the African continent over the next 12 months. “The plan is to extend capacity by 30% year-on-year inside Africa,” he said.

Bezuidenhout said SAA is under pressure to stabilize the carrier. “For the current business year, we want to achieve an EBITA of breakeven and move to an EBIT breakeven within a three-year time period. This should be followed by a net profit in five years,” he said.

(Kurt Hofmann - ATWOnline News)