Cape Town - South African Airways (SAA) will start taking delivery of a fleet of 20 new Airbus A320 aircraft over the next few months.
Minister of Public Enterprises Malusi Gigaba said the order is valued at around R10bn over the long term, and forms part of a broader fleet replacement plan that aims to address the fuel inefficiency of SAA’s current long-haul fleet.
New fuel efficient aircraft are considered key to turning the struggling national carrier around.
The order dates to 2002, when SAA tendered for a new fleet plan to replace its current fleet of ageing Boeings. It is understood that SAA will be leasing the aircraft. The original plan was to purchase the planes.
Gigaba was delivering the department’s budget vote in parliament on Tuesday.
He said it is “no secret that SAA has had a turbulent year in terms of its leadership and governance”.
“I hope that the appointment of the new CEO, Mr Monwabisi Kalawe, and the finalisation of the long-term turnaround strategy will provide SAA with the stability, leadership and direction it requires decisively to turn around.
“SAA has produced a number of turnaround plans over the last 10 years, yet none have put the airline on a sustainable footing.”
Gigaba said the department of public enterprises, in collaboration with the SAA board, will be designing a special governance arrangement to ensure that government is able to rigorously monitor progress on the implementation of the airline’s new turnaround strategy.
“I am happy to report that SAA has already begun to implement the turnaround strategy and has achieved its cost compression target of R1.3bn for the year ending March 2013,” Gigaba said.
He added that over the next year the airline will focus on ensuring that its cash position is stabilised, the cost compression programme accelerated, the international network reviewed and the long-term fleet plan finalised.
Gigaba also touched on the other state-owned airline, South African Express (SAX), and had the gallery laughing when he accidently said sex rather than sax.
The minister said the department and the South African Express board are working to develop a comprehensive turnaround strategy for this company too.
“It is pleasing to note that SAX has already cut R129m in costs in the last financial year. Over the coming year SAX will continue to focus on enhancing efficiencies and cutting costs, improving customer service and enhancing internal controls.”
Gigaba said South African Express plans to have all outstanding audits finalised by the end of July.
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