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SAA could dispose of lucrative landing slots, says insider

Feb 07 2020 14:42
Carin Smith

As part of the quest to improve the liquidity of South African Airways, its business rescue practitioners are considering the potential sale of selected assets.

That raises the question about what assets SAA really has which would be suitable to dispose of.

According to a reliable source, the airline does not have a lot of assets as most of its planes are leased. An asset type that could, however, be considered, would be some of SAA's lucrative landing slots, like the ones it has at Heathrow in London.

In 2012 SAA sold one of its exclusive landing slots at Heathrow after cancelling its direct Cape Town to London flight. At the time it was also seen as an attempt to increase the airline's liquidity.

If it, for instance, changes its Johannesburg to London flight to a daytime flight, the plane could be turned around within about two hours and head back to SA, eliminating a longer, more costly layover.

An aviation expert, who prefers to remain anonymous, told Fin24 that, in his view, it would not be a good idea for SAA to sell its Heathrow landing slots and that the airline would do much better by leasing them out, for instance.

Another international aviation expert, Andreas Spaeth, told Fin24 on Friday that, in his view, selling landing slots will likely have a limited effect for SAA.

"It is indeed a no-brainer that slots could turn into money, but I guess only at Heathrow. In Germany, for example, there is no slot buying and selling and the same applies to most other countries," he said.

A business rescue plan for SAA is expected to be published towards the end of February and presented to creditors for approval.

On Thursday the joint BRPs, Les Matuson and Siviwe Dongwana, said certain routes would be cancelled as from the end of February. None of these routes are profitable.

Internationally, SAA will end its services from Johannesburg to Abidjan via Accra, Entebbe, Guangzhou, Hong Kong, Luanda, Munich, Ndola, and Sao Paulo. It will continue to operate international services between Johannesburg and Frankfurt, London Heathrow, New York, Perth and Washington via Accra. Domestically, it will continue to serve Cape Town on a reduced basis, it said.  

Regional services to be retained include from Johannesburg to Blantyre, Dar es Salaam, Harare, Kinshasa, Lagos, Lilongwe, Lusaka, Maputo, Mauritius, Nairobi, Victoria Falls and Windhoek.

All other domestic destinations, including Durban, East London and Port Elizabeth, will cease to be operated by SAA from the end of February 2020. Domestic routes operated by Mango will, however, not be affected by the changes.

All customers booked on any cancelled international and regional routes will receive a full refund. Customers booked on cancelled domestic flights will be re-accommodated on services operated by Mango.

saa  |  aviation  |  business rescue  |  airlines


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