GOVERNMENT has taken steps
to address the “unhealthy
competition” that exists
between SAA, SA Express and
Mango, which may result in
the airlines rationalising their
routes.
The Portfolio Committee
on Public Enterprises
expressed its concern during
a recent briefing regarding
SA Express and its financial
and operational performance.
To address the issue of
unhealthy competition
between the three state-owned
airlines, the Department
of Public Enterprises (DPE)
has appointed an interdepartmental
task team to
ensure the enterprises work
closely together to promote
integration and co-operation.
The three airlines will need
to rationalise their routes and
services as on some domestic
and regional routes there is
limited demand, says Barsa
ceo, June Crawford. “As they
are all state owned, overall
profitability could be improved
by such rationalisation.”
She says the airlines should
be complementary and not
competitive.
“The airlines are working
on network improvements in
co-ordination with the DPE
and National Treasury, and
the network changes at all
three carriers will achieve
higher returns for the State
while enhancing the reach and
attractiveness of the SA code
in the region. Communication
will be conducted on a route
by route basis as assets are
re-allocated,” Tlali Tlali, SAA
spokesperson, told TNW.
SA Express could not be
reached for comment, but
SAX ceo, Inathi Ntshanga,
was quoted in Business Day
saying the rationalisation of
routes was being undertaken
in a fair manner so that it
did not negatively affect each
airline’s profitability. The timing
of flights was also being
examined, he said.
SAX reported to the
Committee that the austerity
measures introduced as part
of its turnaround strategy were
starting to show results and
that the fourth quarter had
been profitable compared with
the previous three quarters.
