SAA’s big expansion plans
South African Airways plans to add more destinations on the continent from its hub in Johannesburg by the end of April as it rebuilds its business to focus on regional and international routes after a deal with an investor collapsed.
The company is aiming to add nine destinations to its existing 14 and also plans to boost the number of aircraft by 50% to 21 by March, interim CEO John Lamola said, adding that the South African flag carrier has the cash to fund its expansion. He declined to identify the new routes.
“We are cash-positive as a company, and we are able to survive in the next 12 to 18 months on our own,” Lamola said in an interview with Bloomberg Television in Johannesburg.
“Our strategic position is to differentiate ourselves as a national flag carrier to be able to offer the country the connectivity with key investment and trading partners.”
The carrier also plans to open routes to Frankfurt, Munich, London and to cities in the east coast of the US, Lamola said, though those destinations would only be considered in the year ending March, 2028.
The airline, founded in 1934, has had rely on taxpayers for years until its bankruptcy following the pandemic. A plan by the government to sell a 51% stake in the carrier was abandoned in March, forcing the company to scale back its expansion plans after its exit from business rescue.
While South African Airways won’t seek bailouts, it would ask for sovereign guarantees to expand over the next three years, Lamola said.
Plans by President Cyril Ramaphosa’s government to sell its stake in the company to the Takatso group — made up of closely held Global Airways and private equity firm Harith General Partners — were scrapped in March.
The deal would have resulted in a R3 billion ($163 million) cash injection for the airline.
Lamola said the carrier needs an airline partnership that could assist it in extending its reach. South African Airways is working with Kenyan Airways on a project to create a pan-African group, although it focuses on optimizing procurement and connectivity capabilities, rather than an equity injection.
“The domestic market is not our priority,” Lamola said. “Regional and international markets are our focus.”
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