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SAA - the bottomless pit

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Old 29th Oct 2004, 07:12
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SAA recovery programme??

SAA to start charging for 'no-shows' and cancellations
October 29, 2004

By Audrey D' Angelo

Cape Town - SAA would start charging "no-shows" and passengers who cancelled flights - as some European airlines already do - as part of a range of cost-cutting activities designed to turn it around and restore it to profitability, Khaya Ngqula, its new chief executive, said yesterday.

Other measures ranged from cancelling prepared meals to economy-class passengers on short domestic flights to reducing the number of colour printers and desktop printers used by staff.

Cost-cutting decisions announced by Ngqula included working with air traffic control to ensure that all the airline's planes landed nearer to terminals in off-peak times (to avoid using buses), cutting out unnecessary staff travel, reviewing the garage card expenditure by managers and reviewing the need for managers to have laptops and desktop printers.

Measures affecting passengers would include "appropriate fees for cancellations and no-shows, related to expenses charged to SAA". It was suggested that these should be charged to travel agents.

Vanya Lessing, the chief executive of the Association of SA Travel Agents, said it would be unfair to charge a travel agent if a ticket had been issued and the passenger failed to turn up.


A "spoiled inventory" in which a booking was made but no ticket was sold and the agent failed to cancel the booking was another matter. This would be discussed with Adrian Hamilton-Manns, SAA's vice-president (commercial) today.

Ngqula stressed the need for consistent good customer service. He said that over the next six months, "all of us will undergo training in customer care".

The accolades and awards SAA had won showed what it was capable of, but "it is the consistency of such customer care that we will be judged on rather than the stars that shine from time to time".

Management would have to check that standards were being maintained every day. The process "will not be a once-off public relations exercise, but an integral part of how we will conduct our business from now on," Ngqula said.

"If we streamline our people management by rewarding and training SAA people properly, we get our customer care right and with this combination of successes we will be on our way to profitability."


IOL 29/10/2004
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Old 30th Oct 2004, 09:46
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SAA asks public for 'great ideas'

From BBC News website: SAA asks public for 'great ideas'
South African Airways (SAA) is turning to the public for ideas about how to salvage its loss-making business.

Taking the concept that the "customer is always right" a step further, SAA wants people to send in their thoughts on how to improve the company.

Cuts that SAA will implement include limiting staff travel, and reducing laptop computer and printer numbers. It also may end meals on economy flights.

SAA is struggling after it made massive losses betting on currency movements.

Wrong side

In the year through to the end of March, SAA made a pretax loss of 8.7bn rand ($1.4bn) after it took out long term currency hedges.

Instead of weakening - as SAA had predicted - the rand gained against the dollar.

Its new chief executive Khaya Ngqula has implemented a strategy called People Patronage and Profit, which he hopes will succeed in making SAA "the best in the world".

He called on staff to "raise their standards and work at full capacity" so that the group's planes will be full of "satisfied and loyal customers".

And should those customers have any thoughts on where the firm is going wrong or what can be done to put it right, then they should send them to: [email protected]
Well, on the basis that "customer is always right", how about a suggestion to sack Khaya Ngqula, i.e. if only for failing to keep a grip on the failed forex currency hedges ?! There again, one supposes that this would not be seen as politically correct.
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Old 30th Oct 2004, 19:25
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DA...

I don't believe the currency hedging was the fault of KN. Maybe AV or JVJ had a lot to do with it? Don't forget about CA. There's plenty a thread on this forum dealing with the woes of SAA...and plenty woes there are I believe. I've mentioned on another thread, if SAA is the only carrier flying there...I'll walk, or charter. Please note, not because of safety concerns, because of customer care and service.

Graet ideas for SAA...take a break (no use braking, I'm talking about the fall to pieces bit) SAA. You're waisting MY (read taxpayers) money.
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Old 2nd Nov 2004, 06:59
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SAA spokesperson Rich Mkhondo said the cost-cutting measures were being considered after the airline reported a loss of R8,7-billion in March.
ouch

It also would review expenditure by managers on garage cards and do away with excessive allowances.
Am glad to see that they are willing to start at the TOP for a change......
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Old 4th Nov 2004, 09:15
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Hello Bakela.

I have often been tempted to write something in answer to your continued slagging of SAA, but realised that the obvious resentment you feel, and freely express, have a deep-rooted cause, and my comments would probably be wasted.

However, it is now time.

You profess to have been a senior manager at SAA. A Flying Type senior manager? I have my doubts, as your comments show but a shallow understanding of the SAA situation, and the aviation industry as whole.

If you were really a senior manager at SAA, you would clearly understand the way a government organisation is run. You would understand that the hedging losses experienced by SAA and reflected in the financial statements were a consequence of a Transnet (i.e. Government) decision to base future costs and earnings on a Rand at about R14. Some confidence in the economy shown by the government - but that is another story. If the government tells you to hedge at a certain rate, you do so if you are owned by them!

Had the rand gone to R15 to the dollar, SAA would have made a handsome profit and the government and all the managers would have been patting themselves on the back. But it did not, and here we are with SAA being blamed for something it had nothing to do with.

Right, that out of the way.

If you were really a manager, you would clearly understand the rationale behind the purchase or lease of a new fleet of aircraft. Airbus supplied SAA with a really good deal, well beyond what Boeing could supply. In addition, and perhaps more importantly, there were a large number of kickbacks given to the government to sugar the deal. The B747 Classics and the B737-200s, while doing a good job, were beyond their economical shelf life, and in need of replacement. For info, an A340-600 burns about 25 tons less gas on a JNB to HKG sector, and carries about 30 tons more payload. On a full flight, that will translate to almost R500 000 more profit on a round trip as compared to a Classic or -400. And, believe me, the flights are full. Work that out over a year and see what you get. A new aircraft, mate.

If you were a manager, you would understand that Operating Profit translates to health of the company. Yes, the balance sheet is incredibly poor, but have a look at operating profit to get an idea of how the actual operations of the airline are functioning.

If the government says that SAA must fly over the Union Buildings during the inauguration ceremony, or do a fly past of a sports stadium, then SAA does it. How pays the costs? SAA does. Are you blaming SAA for this?

If you were a manager , you would know that SAA does not have all the say in where it operates to. An economically challenged route into Africa, for example, does not make sense, but if the government is intent on opening up tourist and trade markets, then SAA has to go there. Who covers the cost? Guess. If the policy of the government of the day is to put a very expensive cadet pilot scheme into place, and train a whole heap of designated group pilots for the good of the country, who do you suppose covers the costs. If you were a manager, you would know!

Operationally, SAA is sound. Fortunately the cost-cutting measures have not yet affected the training of the crews nor the flight operations of the company. I say yet, as the costs and resources associated with training are enormous, and may yet be the target of future austerity measures. Until then ….

So, Bakela, I resent your continual lambasting of SAA as a whole. You obviously have a grudge against the company and/or its management or employees (or all of the above). Perhaps you did not succeed in the organisation? Perhaps, if you were a flying type, you could not make the grade?

In any event, PPrune encourages outspokenness, and this is why it is so successful. But verbal pollution is bad for the overall tone of the forums, and I see your name on every forum in the African Aviation group, and just about ever posting tells everyone how you would rather walk than fly SAA. Great, I am really happy for you. Judging by the sound of your postings, you CAN walk on water.
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Old 4th Nov 2004, 09:55
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Hello mikemal,

Thank you for a very good, informative & honest post in all respects. It's good to read some worthy stuff now and again.

Regards,

SL
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Old 4th Nov 2004, 12:09
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Hi Mikemal,

agree with a lot of your points......but I did not know that a comparison of classic/a340 and -400/a340 gave the same answer! I thought that the classic and the -400 were two quite different creatures?
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Old 4th Nov 2004, 12:18
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A goodly response Mike.

oTd
 
Old 4th Nov 2004, 13:51
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Hi SortieIII

You are quite right, the Classic and -400 are quite different, but the comparison made was just for simplicity, as I worked both the Classic and 340 on the same route - was never lucky enough to fly the -400!

The -400 is faster, but also burns more than the 340-600, and, comparing the Fuel Flight Plans for the 2 aircraft from HKG to JNB, the -340 seems to carry more payload than the -400 as well. Of course, the gas use by the 340 is also about 25 tons less, so this cost is reduced.

Cheers
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Old 4th Nov 2004, 18:56
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mike

Well said bud, I think it gave everyone a better insight into the whole SAA situation particulary from on operational piont of view. Good on ya mate
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Old 13th Nov 2004, 20:20
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Dear Mikemal,

Thanks for eventually feeling the need to respond. Much better than SAA usually does…especially when pax are stranded.

I feel free to respond to your reply, We do live in a democratic SA don’t we. Is that Tswane or Pretoria you stem from? Anyway, I see you’ve been around on Proone for some time…so I hope you can fathom the depth of your opinion.

Getting down to your comment/opinion…it’s not wasted by the way. I took note of it, thanks.

I don’t feel resentment towards SAA. I have no reason to do so as I never was employed by SAA, never wanted to be employed by SAA and don’t have plans to be employed by SAA. It goes about basic business principles on their behalf, especially customer care. Hopefully KN does something about it.

I freely express my opinion about SAA (not resentment of SAA) because in this country I am allowed to do so. There’s no “deep-rooted cause” as you so freely claim. It seems like slagging off anybody not in line with SAA is fine around here.

As for professing to be a senior manager: read my post. Your reply is typical of somebody that’s gospel is SAA (protective job). I said “…not as a pilot anyway…”. And, I never said with SAA either (they have partners and alliances as well).

As for the shallow understanding of SAA and the aviation industry as a whole… explain the billions of losses? Shallow understanding? I beg your pardon. Maybe you know who in fact suffers (read pays for) from this?

Do you have any idea what SAA went through to transfer their air service licences with the Air Services Licensing Council as well as the International Air Services Council from Transnet (Ltd) to SAA (Pty) Ltd a few years ago? If you want exact details…oh well…leave it there…so called privatisation!

Yes, SAA still belongs to the Government, but why is Transnet going to get SAA out of the Transnet stable…but still in the government? Check the balance sheet!

The ZAR did not go to R15 a US$, so who takes the crap…not AV, not SAA’s management, not the Government, nobody but the taxpayer. Billions of it!!!!

I have no problem with a new fleet of aircraft. If it makes sense, if it’s reasonable an economically viable. E.g. Comparing SAX replacing DHC-8’s with CRJ2’s a while back on the same route? Really, comparing an A320 (20 years+) as new compared to a B73-updated? I do believe that the A320 order was cancelled (in addition to other threads on this forum)!

“Kickbacks to the Government” – well, well, well, maybe the arms deal and the travel agent investigations may shed some light on this!!!! As for your comments on the A340-600 (or any other Airbus performance)…I will leave that to other threads on this forum!

Operating profit: I could not agree with you more…especially the bit on the poor balance sheet. The pity is that the guys and gals doing the job very well at flight level seems to be totally negated by the cock-ups at ground level and at management level.

As for being ordered around by the Government to do fly-pasts at the Union buildings. Then SAA does it. Bull****, SAA does not pay for it. You and I do. If SAA pays for it, the government pays for it, and you said SAA belongs to the government. So, I pay for it and so do you. Do I blame SAA for this? Yes, in terms of PR. If the Government stuffs SAA around, in terms of transparency, let SAA tell their customers (there must be someone that actually pay for the ticket) the facts and stop the BS!! To try and tell me SAA pays the costs is BS!!! BIG TIME!! YOU pay and I pay!

As for marginal economical routes. Does not make sense? In terms of prestige it does! Especially as far as SAA/Government is concerned. “But SAA has to go there” and in the process prevent anybody else from going there…it sucks…. “Who covers the costs”. Not SAA bru, YOU and I!!!! A loss making route to save face and keep competition out…it sucks!!! Prestige!!!

Cadet pilots. In principle, a very good idea and could have worked if managed properly. Just go ask Link and SAX. Read the other thread on this forum re this issue. Was doomed to failure due to bad management. The wheels are falling off!! And YOU and I are paying for this as well!!!

As for my continued lambasting of SAA, none as accused of as you tried to guess. Sorry to disappoint you. Not involved, never was, didn’t try, don’t want to, not interested.

As for verbal pollution on this forum. It’s a phrase I would rather use for some of the statements made by so called very informed people around here. Just read some other threads. Anyway, as the saying goes, you can BS some of the people some of the time, you cannot BS all the people all the time.

Maybe I’ve been involved and maybe you still want to get there. Have T-shirt, been there, done that. I never said with SAA. (There’s other partners and an alliance).

Also, read more carefully what I say.

As an afterthought, SAA just a few days ago had their pax stranded on an island for three days (SAA pays = government pays = you and I cough), and SAA said they had no standby aircraft as all aircraft were involved in the rest of the schedule. What I don’t understand is that 702 Talk Radio reported that the pilots realised after take-off that they would not reach Atlanta due to a shortage in fuel and then turned back. “Operationally, SAA is sound"? Mikemal, I believed so as well until I heard the above.

Anyway, where’s the principle (policy) of the licensing councils (as appointed by the NDoT) in terms of standby aircraft? They always hammer on it! The pax always comes first…

I rest my case. I just pray SAA gets it together because at present, …??????

Taildraggers teaches you the 5th dimension.

BAKELA
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Old 14th Nov 2004, 19:08
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Does somebody have issues ?
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Old 15th Nov 2004, 16:13
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HI Bakela

Your post:

_________________________________________________

As an afterthought, SAA just a few days ago had their pax stranded on an island for three days (SAA pays = government pays = you and I cough), and SAA said they had no standby aircraft as all aircraft were involved in the rest of the schedule. What I don’t understand is that 702 Talk Radio reported that the pilots realised after take-off that they would not reach Atlanta due to a shortage in fuel and then turned back. “Operationally, SAA is sound"? Mikemal, I believed so as well until I heard the above.
_________________________________________________


If you believe everything the press tells you, good luck to you.

The truth of the matter is there was a fuel tank malfunction, a ruptured duct to be specific, and this caused a fuel feed problem out of one of the 4 main tanks. The fuel in this tank then became unusable, i.e. could not be used to feed its associated engine. Thus, as your grade 1 maths will tell you, if one quarter of the fuel (approximately) is thus not available you would probably end up "short of fuel".

So yes, the pilots realised that there would not be enough fuel in the other tanks to take the aircraft to JFK and did what sensible, well-trained pilots do. They thought, planned and decided to return to a suitable airport for a safe landing. This happened to be SAL. The rest is, as you said, not a Flight Operations problem.

Hope this clears this up.

Now if only the press would use their noggins and contact someone in the know....

But then, you should never let the truth spoil a good rumour!

Cheers

Mike
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Old 15th Nov 2004, 16:21
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Mikemal 2 - Bakela 0

Well done Mike for putting the record straight!
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Old 24th Jul 2005, 06:15
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SAA the beginning of the end??

Very interesting rumour doing the rounds around down town Cape Town - with SAA's assets very much less than their liabilities (don"t be fooled - any bean-counter can fiddle the books to make figures look profitable - ask various bean-counters in the states how to do it!!!!!) and with the current strike and management not too worried about it, (note the CEO being out of town !!), it is being considered to declare the airline bankrupt and shut it down.

Then they will restart another (low-cost) airline, but taking people on their terms at considerably less salaries.....................

Sounds interesting.................
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Old 24th Jul 2005, 09:30
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This 'rumour' is not new, it has been around for years.

Maybe spread by SAA management?
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Old 24th Jul 2005, 16:21
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Maybe spread by SAA management
SIII, if that's true, it will be the first time anything got done by SAA's management.

Last edited by BAKELA; 24th Jul 2005 at 17:13.
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Old 24th Jul 2005, 19:39
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Hope something gets done soon! This is an embarrassment
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Old 24th Jul 2005, 20:59
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I think it has been mentioned before that SAA is a taxpayer funded operation, therefore its not a rush by managment to get things done. (Based on a prior post of the SAA Baas up in Kruger etc)
On another note the taxpayer pool in SA is not that big. At least with the money that counts, once it goes away theres no further necessity for border guards at Zim, you wont be able to tell the difference.
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Old 25th Jul 2005, 12:50
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So what exactly happens when a country loses its national (and state owned) airline?

I remember from some education years back that when a state owned/run enterprise folds, the chance of revolution in that country increases. The private sector jostles for power in the sector and other state enterprises battle to save face and keep their employees working.
If the ball starts rolling, its only a matter of time before one after another, the workers turn the country into a very very big mess.

...and cents.
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