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SAA axes unprofitable JHB/Abu Dhabi route

Jan 31 2016 13:37
Fin24

Cape Town - The Minister of Finance has granted approval for South African Airways (SAA) to cease operating the route between Johannesburg and Abu Dhabi.

SAA’s interventions to improve the financial performance on this route, which was launched in March 2015,  had unfortunately not yielded the desired results, warranting that decisive action be taken to mitigate the negative impact on the airline, the Treasury said in a statement on Friday evening.

The goal was to use this new route as a gateway to the Far East for SAA passengers into China and India, and would operate at a substantial profit, as the current routes into those destinations were causing losses to SAA in excess of R400m per annum.

In January this year SAA announced that while its domestic operations remained profitable and grew during the 2013/2014 financial year, and regional African routes performed positively, the group's losses on its long-haul operations grew to R1.6bn.  

SAA operated the Abu Dhabi route in codeshare with Etihad Airways.

The Treasury said on Friday Etihad will still be flying between Johannesburg and Abu Dhabi, offering South African Airways passengers the opportunity to connect to a range of destinations in China, India and Asia as well as in Europe and the Middle East. 

The Treasury said it worked closely with the Department of Tourism to weigh the costs and benefits of closing the route and agreed that the closure was in the best interest of both South Africa and SAA. "The National Treasury and the Department of Tourism are certain that the decision will not impact tourism and connectivity."

Last year SAA suspended chief commercial officer Sylvain Bosc as a result of what the airline deemed to be serious allegations relating to an alleged misrepresentation made by him to the board in respect of the Abu Dhabi route and an investigation by ENS Forensics into such allegations.

The decision as to whether Bosc is guilty of such alleged misconduct will be taken by the chairperson of the disciplinary enquiry.

"The end of our own metal service does not affect the existing codeshare agreement we have with Etihad Airways," SAA spokesperson Tlali Tlali told Fin24.
 
"SAA will re-accommodate its passengers at no additional cost on Etihad operated flights. We will rebook our passengers on the same dates to the extent it is possible to do so. Where there are no seats available, we will consider option of booking our customers for travel either the day before or the day after their original travel date. The booking owner will have to make necessary booking changes for points beyond Abu Dhabi."
 
He said travellers are advised to take note that the departure and arrival times will change as the schedule is based on Etihad operated flights.

"Our re-accommodation policy includes the applicable booking classes and alternative carriers to use. A full refund will be offered only if and when we have exhausted all avenues to re-accommodate our passengers."

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