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SAA rejects claims it overpays for water, fuel

Dec 28 2017 17:49
Carin Smith

Cape Town - South African Airways (SAA) is concerned about what it says are false claims on social media that the state-owned airline pays more than the retail or market price for some of the commodities it procures.

"The claims are baseless and misleading and we reject them," SAA spokesperson Tlali Tlali said in a statement issued on Thursday.

A person called Dave Wailer claimed on Facebook that he recently "picked up" - he does not say where - that SAA buys 1.5 million bottles of bottled water a year. According to Wailer - whose Facebook profile says he is the chief technical officer at Infinite Digital Technologies - the wholesale price of these bottles is R2.75 each, but he claims SAA pays R17.20 a bottle. He does not give the size of the bottles.

Wailer further claims SAA buys the bottled water from an "empowerment company". He also claims that SAA's fuel bill is inflated by 30%, because it too is procured via an "empowerment company linked to the ANC".

There has been no response yet to Fin24's attempt to contact Wailer via his Facebook profile.

According to a written reply provided to questions in Parliament in October 2017, Coca-Cola Canners has a contract worth R9.7m to provide SAA with Valpré bottled water. The contract term is March 1 2015 to February 28 2018.

"We took note of comments on social media platforms suggesting that we procure at premium commodities such as bottled water and fuel. Nothing could be further from the truth and it would be foolhardy not to negotiate a best possible price given the high volumes of supplies we procure," said Tlali.
 
He said a company the size of SAA procures its supplies and products from a range of suppliers in substantial volumes. The airline must also ensure that it complies with its own supply chain policy, National Treasury regulations and other relevant laws.
 
"Price competitiveness is one of the most important considerations in evaluating bids and forms part of our criteria in any tender process. It would be treasonous to procure these commodities at an exorbitant rate," said Tlali.

He said SAA sources bottled water and jet fuel supplies from the bottling company and oil majors respectively, and not from any third parties.

"SAA procures bottled water at a rate even less than the wholesale price (R2.75) suggested on social media platforms. Given the cutthroat competitive environment in which we operate, we make every effort to maintain a competitive edge to advance our commercial interests – and this includes pricing advantages we must secure on our supplies," he said.

Best price

Fuel accounts for about 25% of SAA's operating costs.

"We have to get the best price in the market in order to remain in business. We are comfortable that we are procuring this commodity within a competitive price range," said Tlali.

He said SAA will always demand greater efficiency and innovation from all its supply chain partners to be competitive.

In his view, some of the claims made on social media are "disturbing and devoid of truth" and serve only to hurt SAA's brand.

"It would have been useful and responsible for those who put them up for public consumption, to have taken steps first to verify or validate their information to avoid misleading the public and our stakeholders," said Tlali.
 
"At SAA, our focus is on executing the turnaround strategy in order to bring the airline to financial sustainability."

Jet fuel supplies to SAA ito written answer in parliament:


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saa  |  tlali tlali  |  airlines  |  aviation  |  procurement
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