SAA clean-up pays off

New York - the clean-up at South African Airways (SAA) is not entirely complete, but the benefits are already showing.

Not only has the airline made a R398m profit in its latest financial year to end-March, but it is today, seven months after the year end, still within budget for the current financial year.

The airline's financial performance has been despite the economic crisis that is expected to result in airlines worldwide suffering a loss of about $16bn this year.

Global industry experts said in New York on Tuesday that, while green shoots of recovery can be seen in the global economy, it's still too early to know how to nourish the green shoots.

"It appears that international business-class flights are again on the increase. Regular travellers, including bankers, are again flying in the aircraft's front seats," reports Jan Albrecht, chief executive of the world's largest airline alliance, Star Alliance.

Airlines depend on business-class passengers for profits.

Business and first-class passengers to a large extent subsidise economy-class flyers and, since October 2008, there have been considerably fewer of them.

Chris Smyth, acting chief executive of SAA, says the airline's restructuring between 2007 and 2009 prepared it for the economic crisis. "The restructuring led to a saving of R2.5bn in costs. Today SAA is profitable mainly at industry level, thanks to the successful restructuring."

Smyth says this also means that SAA is not considering any further staff retrenchments.

- Sake24.com

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