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SAA lacks planes to fly to China

Oct 06 2010 11:14
James-Brent Styan

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Johannesburg - South African Airways (SAA) wants to fly to China, but does not have enough planes to serve the route.

SAA CEO Siza Mzimela said its existing fleet limits expansion to more profitable routes.

The airline wants to fly to China, but does not have enough planes to serve the route. China is the market where everyone wants to be, said Mzimela.

SAA has nine A340-600 planes which could be used for the Chinese route, but they currently fly to other long haul destinations, like London and New York. The A340-600 is SAA's biggest plane with the longest distance range.

Johannesburg is ideally located to be an excellent connecting point between South America and China, said Mzimela. SAA needs to capitalise on this strategic advantage.

The airline will receive the first delivery of six new Airbus A330-200 planes next year. One of the planes will be used on the London route and another to fly to South America.

SAA's stretched balance sheet – it has a debt to equity ratio of 20:1 – makes it difficult for the airline to get financing. Mzimela, however, is upbeat about financing prospects.

The airline has already secured financing for the new A330-200 planes, which have a current price tag of $190m each (before discounts and other allowances, which are the norm with these kinds of deals).

SAA will also receive the first of 20 new A320 planes in 2013. Financing for these planes still needs to be concluded.

The new-generation planes, which can use up to 25% less fuel, will play a big role in SAA's future profitability.

- Sake24.com

For business news in Afrikaans, go to Sake24.com.

saa  |  china


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