A NATIONAL aviation policy was envisaged which would govern the activities of all the state’s airlines‚ namely South African Airways (SAA)‚ SA Express and Mango‚ which will all fall under one holding company‚ Public Enterprises Minister Malusi Gigaba said in Parliament on Tuesday (10/09/2013).
The route networks‚ fleet acquisition and long-term strategies of the three airlines would be aligned in pursuit of South Africa’s national development goals.
Mr Gigaba also indicated in an address to Parliament’s public enterprises portfolio committee that a Fly South Africa policy or act was envisaged that would require all government officials to use the state-owned airlines — with the proviso that they improved their customer service and efficiencies.
He said the government wholly endorsed SAA’s long-term turnaround strategy which would involve SAA’s withdrawal from loss-making long-haul routes and a greater focus on the profitable domestic and regional African markets.
SAA’s African routes were coming under increasing competitive pressure‚ particularly from Middle Eastern airlines.
The turnaround strategy was unveiled by SAA CEO Monwabisi Kalawe to the committee for the first time. The long-awaited strategy will determine SAA’s business over the next 12 years and is intended to put the national airline on the path of profitability‚ financial sustainability and operational efficiency.
In his opening remarks‚ Mr Gigaba stressed that a reworked route network was the "bedrock” of the strategy.
He said the department was engaging with the Treasury with regard to a recapitalisation of SAA to re-establish the national airline as a going concern.
While these talks were under way‚ SAA would focus on cost containment and strengthening its balance sheet‚ in particular by reducing its high level of debt and improving its debt to equity ratio.
Mr Gigaba said the department would beef up its monitoring and evaluation of SAA to ensure it was steadfastly implementing the long-term strategy.
He noted that the new board‚ which was appointed late last year‚ had been given the mandate of coming up with a turnaround strategy and review the airline’s business model.
This‚ Mr Gigaba said‚ would have to include a review of the route network‚ fleet optimisation‚ an assessment of the state’s airline assets‚ the development of a cost-management framework and the incorporation of an African strategy.
The minister said it was paramount that SAA deliver on its mandate and become commercial sustainability while recognising that the airline industry is a highly competitive one that operates on low margins. © BDlive 2013