SAA's non bail-out bail-out
"A PROPOSED multibillion-rand recapitalisation of South African Airways (SAA) by the government is not a "bail-out", said Siza Msimela, CEO of the state-owned airline, on Monday.
Ms Msimela said funding of R6bn, which SAA had requested from Parliament, was needed to strengthen the airline’s balance sheet for a fleet renewal programme and improvements such as the introduction of a premium economy class and the extension of business-class cabins on long-haul flights.
Airlines all over the world are struggling due to rising fuel and industry costs, higher airport user fees and declining passenger demand.
Australia’s Qantas has reported a loss of more than A$200m for its international division in 2011, American Airlines has entered bankruptcy proceedings, Lufthansa has announced a €381m loss in its first quarter and 3500 job cuts, and Emirates has seen a 61% decline in yearly profit.
In South Africa, Velvet Sky has ceased to operate and Comair , the operator of British Airways and Kulula in the country, announced its first loss in 61 years.
Airlines that have stopped flying to South Africa include Malaysia Airlines, TAP Portugal, Jet Airways and Iberia.
Ms Msimela said airline industry profits were expected to fall further this year.
SAA needs recapitalisation to replace its short-haul fleet of 737-800s by 2017. Two A320 aircaft were delivered earlier this year, the first 20 new and more fuel-efficient A320s expected in the next five years."
Mzimela draws us a picture of woe in the industry, all the big airlines in trouble..blah but we aren't, and "we don't need a bailout, we just need six thousand million rands to recapitalise"..
Having swallowed up R18 billion since 2004, thats R2,225,000,000.00 per year....now they want to buy fuel efficient aircraft? What do you care about fuel efficient aircraft when you can just run with begging bowl in hand to the government every year?
How about keeping the aircraft they have, which are pretty efficient anyway (probably the most efficient thing there), buying the new seats they need, and then asking for a couple of hundred million for the 5% difference in fuel they would use? Would save us a few thousand million.
Last edited by JG1; 16th May 2012 at 18:35.