SAA’s route network has been called
into question in the aftermath
of the Johannesburg-Abu Dhabi
route having been scrapped. The
airline was allegedly warned of the
route’s lack of profitability before it
launched.
The airline told TNW on January
29 that it had decided to pull the
service that it launched on March
29 last year.
Inside sources at SAA have told
TNW that the final business case for
the Johannesburg-Abu Dhabi route
was signed off in August 2014,
at which point the route had all
the components to be successful.
However, in the eight months
between the signing of the business
case and the actual launch of the
flight, the circumstances in South
Africa changed substantially – the
Ebola outbreak had heavily affected
travel from China, South
Africa’s economy had taken
a serious knock, Emirates
had obtained the rights for
a seventh daily frequency
to Johannesburg, and both
Qatar and Turkish Airlines
had obtained the rights
to up their frequencies to
South Africa.
The sources say that in
March 2015, just short
of a month before the
launch, it became clear
that the route would no
longer be profitable as a
result of these external
circumstances and that
at that time, both the
treasury and the SAA board
were alerted to this fact
by the ceo and the chief
commercial officer.
But by this time, it was
impossible to pull the route.
The flight had been booked
almost to capacity for the
first three months at launch
fares. However, sources
reveal that an exit strategy
was developed. When
Emirates then approached
SAA, saying it had changed
its stance on the codeshare
facilities and that it would
allow SAA codeshares past
its hub in Dubai, the leaders
of SAA headed to Paris to
sign the deal.
However, the plug was
pulled on the Emirates
deal to codeshare beyond
Dubai at the last minute
for reasons that are still
unknown. Despite the
fact that the Emirates
deal was torpedoed, the
airlines’ chief officers took
a decision in September
last year to pull the plug on
the Abu Dhabi route and
signed the papers for the
cancellation of the route.
But SAA says the route in
question did not perform
well, made losses and so it
applied for the withdrawal
of its resources. SAA
maintains that claims that
the board was notified
one month before the
launch sound “suspicious
or opportunistic”.
“An investigation has
been initiated into all
circumstances around
the launch of this route.
We must just resist the
temptation to debate the
merits or otherwise of that
exercise in the media,”
says SAA spokesperson,
Tlali Tlali, noting that TNW’s
faceless sources could be
self-serving.
On hearing the news of
the route cut, agents took
to TNW’s sister publication,
eTNW, to question why the
route was launched in the
first place.
“More homework should
have been done before
launching it and before
teaming up with Etihad,
which is the weakest of
the Gulf Three and
[considering that] Abu Dhabi
is the second-weakest
hub after Bahrain,” said
Buchanan Execu Travel
owner, Garth James.
When SAA first announced
it had cut back frequency on
the route from daily to three
times a week in November,
Sure Viva Travels md, David
Pegg, commented: “When
Etihad is selling flights from
Abu Dhabi to London at
R1 170 return, it means
SAA receives less for its
eight-hour [portion of the]
flight to Abu Dhabi than it
does for its one-hour flight
to Durban – you don’t have
to be a rocket scientist to
see where that is heading.”
