SAA lacks planes to fly to China
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.
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that is why SAA is the best airline in the world!!!!
Here come more government guarantees.
"The new-generation planes, which can use up to 25% less fuel, will play a big role in SAA's future profitability."
With a debt to equity ratio like the one quoted in the article then future profitability is a very very long way away.
Eish,You buying new planes? what about my new Mercedes and BMW's every year? SAA is going to pieces....
If SAA did not leave 3 aircraft all day in London on a daily basis and utilised the aircraft more effectively, both Beijing and Shanghai would be possible. Flying a twin engine A330 to London or South America makes little sense. A330's could be used for Munich and Mumbai and African markets, even Mauritius.
John the Baptist
Is it planes or brains that are missing? Just asking
Is walking an option?
joseph rydell tettey
I am shocked at Debt to Equity ratio of SAA.What a hopeless balance sheet?SAA has failed South Africa.Twenty(20) years from now SAA will not be profitable.
Maybe operating on a tempory licence to both Shangai and Beijing using leased A330-600 will help
them determine route profitability, but obviously they have already had a busisess model for that so big up to Siza and the team
I think this will help them regain their lost to other Asian and African airlines, and really this will help many passengers as we really don't visit Hong Kong but China and connecting from Hong via trains and buses is a mission, good luck Siza
Surely SAA should be using that R581m profit to pay of some debt?
SAA going the same way as the Railways, Eskom, Telkom and every municipality in the country. And why you may ask yourself ?? Because our BEE brethren are a long way off managing any enterprise under their control.