A revised strategy to turn
SAA into a profitable
airline in the next three
years has been welcomed by
the trade.
SAA ceo, Vuyani Jarana,
addressed trade leaders
last week, who were
also encouraged by his
acknowledgement of the
industry’s importance to SAA,
producing between 75% and
85% of its income.
A systematic approach has
been adopted to drive the
turnaround plan, focusing on
four main areas – revenue
management, expenditure
reduction, a fixed-cost
focus and a balance sheet
restructure.
Marco Cristofoli, coo of
BidTravel Leisure and ceo
of BCD Travel, and Mary
Shilleto, ceo of Thompsons
Travel, were both encouraged
by the engagement.
“He was open and honest,
explaining that the airline
was not in a great situation
at present. He asked us,
as partners, to bear with
them while they took the
necessary steps to bring
the organisation back to
profitability, admitting that it
would be painful at times,
especially during periods
when routes were cut,” said
Marco. He said Vuyani had
also assured them that he
had support from the highest
levels of government.
While Marco Ciocchetti, ceo
of XL Travel agreed, he said
the bad news for agents was
that SAA would continue to
reduce its domestic flights.
TNW understands that the
ceo explained that SAA lost
money on all its domestic
routes, even with full loads,
which prompted the transfer
of domestic routes to Mango.
SAA will, therefore, ultimately
be concentrating on business
class, premium economy and
connecting passengers.
“This impacts our income,
because initially there will
still be no remuneration for
booking Mango. SAA flight
numbers can still be booked
on Mango and would continue
to be paid on the agreement,
but flights will be more
expensive than Mango, due
to their added value offerings,
including meal vouchers and
the ability to earn Voyager
miles,” he said.
Marco Cristofoli agreed,
saying the message between
the lines was that SAA would
not be in a position to pay
the same discounts to trade
and corporates that they
had received in the past,
particularly in relation to
domestic routes.
