30 Jan 2015
SAA board chairperson:
SAA CEO Monwabisi Kalawe remains suspended – SAA chair says.
30 Jan 2015
Fin24 askes SAA acting CEO about the storm regarding his (lack of) qualifications.
He responds:
“I find it quite frustrating” DA needs to back up their statement, he says
He says his CV is available from Talent Africa and from his PR person.
“What I have claimed to have is all the tertiary qualifications
“I’ve got a track record of 7 years profitability,” he said.
Recently SAA reacted very strongly regarding the issue about Bezuidenhout’s qualifications.
30 Jan 2015
SAA CEO speaks:
BEIJING CANCELLATION:
1st week of April, Air China will open in month of May.
30 Jan 2015
Nene responds to Fin24 on BEIJING CANCELLATION:
On the date, all we know as government we have approved the cancellation of the Beijing route.
No confirmed date.
CEO will clarify.
30 Jan 2015
SAA CEO:
“Some of our Asian routes are problematic”
But SAA has a strategic Abu Dhabi route.
30 Jan 2015
SAA CEO:
India also a loss making route
Jet Airways was last airline here
But with some routes demand is not efficient
SAA has service R5.5bn in interest charges on its debt from local and international organisations that it has served on its own.
30 Jan 2015
SAA CEO on routes...
Beijing route: We have gone to engage with Air China Within a month of changing operations, it will then take over.
Air China could have a direct route from SA
Unclear when this could happen.
30 Jan 2015
LTTS (Long term turnaround strategy)
Board chairperson Dudu Myeni...
“We are not revising the LTTS” “It’s a living document; it’s not something you say is cast in stone for the next 20 years”
30 Jan 2015
Minister Nene:
“Guarantees are not bail-outs”
“We put in the guarantee but we move in with the state-owned company”
...You cannot only achieve the developmental side without being sustainable.
30 Jan 2015
SAA lost close to a R1bn in three years on the Beijing route, says SAA CEO.
SAA closing the route...application applied for cancellation of route to government.
30 Jan 2015
Minister Nene answers questions:
He’s talking about the 90-day plan and long-term plan.
“We need a credible plan on the table to support any state-owned company”
“It is something that we are going to monitor quite closely”
“It’s not recapitalisation,” he says.
We do not want to build the sustainability of state-owned company at the expense of other government programmes, he says.
“Indeed we have approved the cancellation of the China route” - SAA closing loss-making routes... this is the Beijing route.
30 Jan 2015
30 Jan 2015
Question asked about 90 day strategy and whether there will be an announcement about the routes to China.
Question also asked about suspended CEO and sale of non-strategic assets.
30 Jan 2015
30 Jan 2015
Minister Nene:
Funding for state-owned companies will also take place once the non-strategic assets the minister talks about will be disposed of.
National Treasury together with departments will monitor all guarantees issued to all state-owned entities
Government guarantees only provided on a basis of a sound business plan, the minister says.
Recapitalisation of state-owned companies will only happen in a way that does not compromise the state’s balance sheets
SAA’s continued losses have prompted govt to adopt unusual business approach - Govt intervened last year in SAA.
SAA subsequently crafted a 90 day turnaround plan. Among cost cutting measures include route closures.
“It will take time for the benefits to show on SAA’s bottom line,” Minister Nene says.
SAA must produce annual savings of R1.3bn, says Nene.
30 Jan 2015
30 Jan 2015
Nene:
State-owned entities are important.
They need to be financially sound and not a drain.
Nene now talking about deputy President Ramaphosa overseeing public companies that are in trouble.
In some instances, government will have to release non-strategic assets.
30 Jan 2015
“I urge the board from SAA here today to help us turn the airline around”
...Now the minister takes to the stage - Minister Nene.
30 Jan 2015
30 Jan 2015
Board Chairperson Dudu Myeni:
SAA has not achieved long term sustainability yet.
“When I say slow pace or failure, it’s something that the board is really asking itself,” she says.
“Implementation is the type of deficit we often face in South Africa”
“This 90-day plan...have concrete deliverables”
“I’m happy to report today that substantial progress has already been achieved".
30 Jan 2015
30 Jan 2015
Board Chairperson Dudu Myeni:
“As we saw from the presentation by our acting CEO...SAA did achieve 70% of its developmental performance indicators for the year”
SAA Boosted job creation, tourism, she says.
Employees in the key skill areas benefited close to R200m in training.
“The SAA group accounted for 43% of all passengers air within and out of South Africa”
“There’s no doubt that SAA plays a key role in the development agenda of our country”
However, regarding the commercial aspect, SAA is less successful, she says.
30 Jan 2015
30 Jan 2015
SAA CEO:
Costs are a problem.
“With lower oil prices, average ticket prices will be reduced”
Number of aircraft globally 3.1%; number of seats increase forecast globally over 5%
Africa is also becoming more competitive.
“More opportunity for SAA but this also means more competition” – more competition in terms of connecting to more places.
30 Jan 2015
SAA CEO back on stage...
“Effectively we keep on chasing our tail,” says SAA CEO regarding the air carrier’s costs.
SAA also has a disproportionate exposure to fuel: expend 36% of total expenditure on fuel...
This is because SA is geographically more removed, older aircraft type.
30 Jan 2015
30 Jan 2015
Improved from negative position of R1.1bn to R79m overdraft (net cash and cash equivalents)
Fuel expenses increased by R1.5bn
30 Jan 2015
R1.4bn in impairments...had to replace wide body fleet.
R800m we had to impair on these aircrafts
2002 contract increased to 20 aircraft.
Only started taking deliveries in 2013.
Four aircraft delivered thus far.
30 Jan 2015
Hedging/Translations
SAA made a hedging profit of R691m
“We don’t immediately get the benefit of the reduced fuel price”
“We have hedged approximately 38% of our hedging exposure over the next 12-18 months”
“Due the increased exchange rate we don’t have the same benefit as other airlines”
30 Jan 2015
30 Jan 2015
30 Jan 2015
Aircraft maintenance costs increased to R376mn (up by 16%)
Aircraft lease costs increased to R451m (up by 22%)
Navigation landing and parking increased by 18% to R319m