S.A.A. Strategy

[ByAirMail]

S.A.A. strategy, or lack of.
All the Star Alliance and One World carriers have been talking and discussing counter measures and strategies on how to handle the threat of a global economic slowdown and rising fuel price.
I have not heard or seen any strategy from the S.A.A. management.

Will it be miss management as usual and come budget time everything will be blamed on the fuel price and the sympathetic Min. Alex Erwin will dig deep into the government coffers … again.

[evanb]

They had a day long shindig last week talking about strategy, network, fleet, fuel, etc ... if that is not good enough then what is? For once they actually seem to have their finger on what is going on ... give them a chance to prove us right or wrong with their results before you start going at them again!

[Beta Light]

A day long meeting, I know of training schools that do more then that to streamline the business.

This sound like the ESKOM book of management. Ten years ago when ESKOM was warned by their engineers about the maintenace of power stations and staff qualifications they had a day long meeting.

The rest is history.

[evanb]

It wasn't a meeting ... it was a day long talk to the press about what is going on ... the original post was speaking of "talking and discussion"!

[ByAirMail]

... it was a day long talk to the press about what is going on ...

Thanks evanb, have you got any links / copy's of the media reports after this intensive briefing, as I can't find any.

[WhinerLiner]

SAA has a tried and trusted strategy:
1. Get money from the taxpayer
2. Spend it

The day long chat was probably just about bonus allocation.

[Lifes-a-Beech]

Great chirp Liner...you have summed it up perfectly.

I have on good authority that SAA has just hired 50 new pilots and have another 50 shortlisted, awaiting appointment...mmmm!!!

[evanb]

http://ww2.flysaa.com/Utility_Navigation/About/contents/news_and_media/news_media87.html

[flyknight]

SAA has a tried and trusted strategy:

I think the following should also be inserted (first):


Incompetent people are appointed in top positions, then


1. Get money from the taxpayer
2. Spend it


then, pay bonuses to the (incompetent) people for a job (NOT) done!

[ByAirMail]

Thanks evanb, but there is nothing new that was not made public 5 months ago. I the meanwhile fuel price increased 30% and there is looming economic slowdown. Surely this is a good reason to once again re evaluate your strategy.

I work for a Star Alliance member and we have weekly meetings and press release as to our strategies to the current market.

I guess it is the difference between having to report to share holders and being gov. funded.

[evanb]

A lot of what was said is new: fleet expansion, new routes, etc

[ByAirMail]

A lot of what was said is new: fleet expansion, new routes, etc

Not Quite: do a Google search and all this was said at least a year ago.
The only "new" word in there is Maun and some more capacity.

I reread the link you attached, it is just an update on the restructuring, everything else is on Google months ago.

Fleet expansion was announced months ago.

As far as the new fleet go, they are talking about 2012. Even if they decide on a new fleet tomorrow, the production line for efficient airplanes is long.

What are they going to do in the mean time to survive until 2012? What is the strategy, not the plan?

[evanb]

The aquisition of the 6 aircraft (3 wide and 3 narrow) is new. Board only took decision about 2 weeks before the announcement. There were prior rumours but that was not rocket science!

New routes, well the expansion on many of those routes, mumbai, perth, etc is very new talk, expansion on sao paulo and luanda is not so new! Frankfurt and munich expansion is so new the planners didn't even know about it! Its still so new the planners still don't even know about it :-)

[Plore]

What are they going to do in the mean time to survive until 2012? What is the strategy, not the plan?


Same as always, don't pay the people doing the work and then give the managers a bonus for saving the company costs. Maybe even a little kickback or management positions for some of the AUSA team for leading the staff blindfolded into yet another trap.

Let me rather not start tonight, I feel a slight case of high blood pressure coming up. :uhoh:

[Placido]

Very few people know the difference between strategy and tactics.

This has been the downfall of many a business and government.

Strategy is your end goal, tactics is how you get there.

This is not a case of semantics, if you confuse the two you're running in circles.

First SAA needs to determine where they want to be in 10/20/30 years' time. Then they need to discuss the tactics of achieving the goal.

To make acquiring new aircraft your strategy doesn't make for great business........................

[ByAirMail]

Strategy is an elaborate and systematic plan of action. Can be called gameplan. Your strategy should help you achieve your objective ( target or aim).

If your objective is to become a profitable airline I don't think ordering new aircraft and increasing capacity is the way to do it. Every other airline in the world is looking at cutting capacity and restructuring routes due to fuel price.

When every airline in the world were on a recruitment drive 6 months ago S.A.A. were talking about lay off's. Now that everyone is cutting back S.A.A. talk expansion. Does not make sense. Sorry evanb , but we only have their track record to judge them by.

[evanb]

I agree that their track record is not very good. However, one needs to look at the track record of the current managers (note not directors)! When one does look at their track record there is not much to look at since many of them are very new to SAA!

Why are SAA expanding at a time when everyone else is rationalising? I think its not a fair question since not everyone is rationalising, most carriers in the developing world are actually expanding: Middle East, Brazil and India! Even though oil prices are rising and the economy is slowing its still growing pretty quickly (unlike the US, Europe and Australia which are in recession). Demand on interantional and regional routes is strong (hence the expansion) and yields in the domestic market are growing (since the demise of Nationwide). Also given the number of aircraft being parked at the moment lease rates are looking quite good and if one is able to tie in good lease rates going forward one will do well in the future!

From the inside ... there has been a large improvement in margins at SAA in the last year. This is pressure from oil prices but the long term model requires greater revenue ... the margins will return when the oil price subsides! The million dollar question is when???