SAA A340 leaves for Jet Airways - new scandal

[beechbum]

Landed just ahead of SAA's A340 tonight departing for its lease to Jet Airways in India. if memory serves me call sign/registration being -SXD. How long will it be on lease for? For the sharpies amongst us, watching the A380 footage, I noticed an Airbus in SAA colours on the ramp. A340 or A319? Couldn't make it out as just saw the tail section. How many A319's still due for delivery?
I guess with the two A340's out to pasture to Jet, there will be no real requirement for crew in the near future.
But who knows!!!!;)

'RIFT' - Raw in the Face talent - you either have it or you don't!!

[fluffyfan]

Beachbum.........apparently we are waiting for 1 more A319 should arrive soon, could have been that, but could also have been a 340-300 apparently 2 going to Jet Airways on contract for winter....sorry not much help

[Beta Light]

Should keep the bus in JHBurg for winter, only time it can get airborne with a revenue laod.....

[Gauteng Pilot]

It was definately a SAA A340 in the video footage of the A380 first flight

[BAKELA]

And I thought it was just management leaving SAA...:ooh: only time it can get airborne with a revenue laod..... Soos die Oom met die honderd Pond in Poffadder se poskantoor in 1934, "Niggie, ok maar net!".

[MarkD]

I think undelivered 343Es (two?) are bouncing from TLS to SAA who take delivery and are being sent on immediately to Jet. Could be wrong though.

[Gunship]

Ahhh so that 's why the (near empty) A 340's are replaced by the A310 on the West African legs :E

[jettison valve]

AFAIK, Jet AW will receive three SAA A343. Two more or less straight from the line in TLS (maybe with a short visit to JNB), the third one from the currently operating fleet.
Anyone knows details about the duration of the lease?

Cheers,
J.V.

[unablereqnavperf]

Can only have been an A340 at TLS as the A319's are built tested and delivered from Finkwerder near Hamburg just picked up my companys latest 319 (and several others from there). Have seen sevral spoories aries there too.(319's that is )

[4HolerPoler]

Seems all is not well (again) in the Ivory Towers. Report in today's Sunday Times.
SAA’s R110m bungle

SA AIRWAYS (SAA) executives shortchanged taxpayers by a staggering R110-million in a deal involving the leasing of three airplanes to an Indian company. Three Airbus A340-300s were signed off to India-based Jet Airways earlier this year in a deal worth more than R450-million over two years. Questions from Business Times about the deal have sparked a hurriedly convened “special” board meeting, scheduled for tomorrow.

The three Airbuses are part of a fleet ordered to replace SAA’s ageing fleet of Boeings, and the lease was in line with its plan to cut costs and improve profitability by leasing what would have been idle aircraft over the next two years. But it has been established that SAA settled for Jet Airways’ monthly rental offer of $925000 per aircraft compared with a $1.15-million offer from rival Indian company, Air Sahara. Jet Airways is owned by Indian billionaire, Naresh Goyle. The difference between the two offers is about $675000 a month and roughly translates to about R110-million over the lease period, assuming an exchange rate of R6.80/$. The South African Transport and Allied Workers Union questioned why the airline had opted for a lower offer, losing millions of rands in the process. Spokesman Ronnie Mamba said: “The airline is supposed to find ways of making a profit ... so this really does not make any sense.” He said the union would take up the matter with SAA’s executive team once it had made its own enquiries.

The airline, which has a mandate to secure maximum commercial benefit for its stakeholder — the government — refused to answer any questions. Despite being sent a fax containing six questions on Friday, Sarah Uys, SAA’s acting communications manager, responded that the airline would not comment. In doing so, SAA refused to explain how many offers they had received for the aircraft and whether the offer from Jet Airways was the best financial deal on the table. However, since sending the questions to SAA, a “special” board meeting has been scheduled for tomorrow to deal with several matters — including the questions from Business Times. Business Times asked these questions after establishing that the vast price difference had been raised by an unnamed senior executive during an SAA meeting.

It has also been established that, internationally, there is a huge demand for long-haul aircraft and that industry rates for leasing a single Airbus average $1-million (R6.8-million) a month, depending on the model. Chief executive of the International Lease Finance Corporation, Steven Udvar-Hazy, said growing demand had increased the aircraft lease rate by 15% in the past six months. On Friday, questions were also sent to the office of Public Enterprises Minister Alec Erwin, but his office declined to comment. Spokesman Gaynor Kast said this was an SAA management issue and it could not be addressed by Erwin. “Management should comment if they so desire, however, we would not expect or require them to comment on their commercial deals,” Kast said. She said Erwin was aware of the deal and was confident that management had acted in the best interests of SAA.

In a telephonic interview, SAA board chairman Professor Jakes Gerwel said the Jet Airways offer was presented to the board by SAA chief executive Khaya Ngqula and his chief financial officer, Tryphosa Ramano, on March 7. Gerwel said that although the board knew of an alternative offer, members were convinced that Jet Airways had presented the best offer. “I’m busy talking with the Minister [Alec Erwin] on the other [phone] line about the same issue,” he said. Gerwel later contacted Business Times, stressing that the Jet Airways offer had been the best. The national airline posted a net loss of R8-billion last year and Ngqula, the former CEO of the Industrial Development Corporation, was bought in to rectify the situation.
What a bunch of palookas.

4HP

[Beta Light]

The same Jet Airlways that have been accused in the U.S.A of having al-Qauda links!

[B Sousa]

"SA AIRWAYS (SAA) executives shortchanged taxpayers by a staggering R110-million in a deal involving the leasing of three airplanes to an Indian company."

Hey, Im not a Mathematician nor do I expect to be consulted regarding questions about Deep Space, but dont you think just a little bit of that R110M might have made its way into someones pocket??

[Gerard123]

Of course it was an A340 would the ceo ever charter anything less to whisk himself to France at the taxpayer's expense. :rolleyes:

[SAA201]

This from www.busrep.co.za


SAA's lease deal will help it to enter the Indian market

June 21, 2005

By Audrey d' Angelo

Cape Town - SAA's entry into the fast-growing Indian market would be helped by having leased three Airbus A340-300E planes for which it had no immediate use to its codeshare partner Jet Airways, industry sources confirmed yesterday.

Although SAA is at present the only airline flying directly to India from this country, and has increased the number of flights in response to rising demand from business travellers and incoming tourists, it has indirect competition from the Emirates airline on the route.

Jet, the largest Indian airline, carries SAA passengers from Mumbai to domestic and regional destinations under a codeshare agreement enabling SAA to attract more passengers by selling tickets to more destinations in the region.

Jet is being courted to become the Indian partner in the Star Alliance of international airlines, which SAA is preparing to join in March.

Industry sources said yesterday that, in view of these factors, it made sense for SAA to have leased the Airbuses to Jet rather than to a rival Indian airline, Air Sahara, which, according to a Sunday newspaper, was prepared to pay more for them.

Linden Birns, Airbus's representative in southern Africa, said SAA had extended a "bargain price lease" of three smaller Airbus A340-200 aircraft negotiated at a time when there was less demand for long-haul planes and therefore the airline was not in urgent need of the aircraft it had leased to Jet.

Khaya Ngqula, SAA's chief executive, told Business Report in a recent interview that although SAA's results would show that its operating profit now put it among the top 10 airlines, its cash flow at the time he joined the airline was insufficient to pay for the three A340-300s even though they would be needed later.

He had therefore decided to lease them out until SAA required them.

SAA spokespeople would not comment on a suggestion that Jet was paying less than Air Sahara would have.

[Deanw]

Sapa www.bday.co.za Posted to the web on: 22 June 2005

THE decision by SA Airways not to accept the higher bid in a leasing agreement was not based purely on profit motives, SAA chief executive officer Khanya Ngqula told parliament today.
SAA recently signed a leasing agreement providing three Airbus A340-300s to Indian company Jet Airways instead of with rival airline Sahara which reportedly promised a deal R110m more lucrative.

"Would I give a R2.4bn asset to a company that won't show me their balance sheet or who won't tell me who owns them?" Ngqula asked, stating that Jet Airways was a public company whereas Sahara was a private organisation.

"It's not just about money. It's also about what happens if the plane crashes, and the credit cheques of the people we are leasing them to," he said.

Ngqula has come under fire for not going with the Air Sahara deal.

Explaining his decision to the Public Enterprises Portfolio Committee, Ngqula said Jet Airways was more firmly established and as a public company its books were easily scrutinised.
"There were in fact seven other airlines interested in the deal but we had to choose one. So there were seven losers - I have yet to find a happy loser," he said.

SAA was forced to lease the new aircraft to Jet Airways for approximately three years until it had recovered financially and developed routes to accommodate them, he said.

"We did a deal that allowed us to more than break even and then get them (aircraft) back."

The airline has already had to cancel 15 aircraft on order from Airbus but said it needed these three.

"We need these planes. We know the world is buoyant in terms of travellers - we see it in South Africa," Ngqula said, predicting the market would grow enough in two years to allow SAA to get the aircraft back.

The airline is recovering from a financial loss of R8bn posted for the 2004 financial year. Ngqula said never again would this happen and predicted SAA's results, expected in two weeks, would be "very, very good".

In the first half of 2005 it was already R365m in the black and predicted revenue would grow from R17bn to R19bn by the end of the year.

"We are very, very comfortable," he said, explaining how SAA would capitalise on its financial liquidity by focusing on Africa.

He said the continent was proving to be its most profitable sector enjoying 33% profit margins.

In July SAA began new routes to Washington via Accra (Ghana) and to Livingstone in Zambia and Zanzibar. It had also applied for additional frequencies to Accra, Lagos (Nigeria) and Luanda (Angola).

"There are certain key markets we have to get into."
SAA would also be focusing on capturing Indian, Chinese and Nigerian markets and would resume flights form Johannesburg to Bangkok in October this year, Ngqula said.



SAA Overpaying For Old Leases - CEO

June 22, 2005

South African Airways (SAA) is leasing at least 4 Boeing aircraft for double their market price under contracts entered into by its previous management, the company said on Wednesday.

SAA Chief Executive Khaya Ngqula said the state-owned carrier was paying USD$900,000 a month each for the Boeing 747-400s when the current market price was only about USD$450,000.

The lease contracts were entered into by previous management and would run until the end of 2006, adding to operating costs as the company struggles to return to profitability after years of heavy losses, he said.

"It\'s a legacy, we just have to swallow it," Ngqula told reporters after a briefing to parliament\'s public enterprises committee. "These are some of the legacies we have to deal with," he said.

Ngqula said the airline was trying to re-negotiate the leases.

SAA posted a pretax loss of ZAR8.7 billion rand (USD$1.3 billion) in fiscal 2003/04 but made an operating profit of ZAR132 million (USD$19.6 million) in the six months to September last year.

The company is due to announce its full-year results early next month, and government has indicated that the results are expected to be "good".

Ngqula said profit for the second half of the year should better the first half-year result, without elaborating further.

He also defended SAA\'s decision to lease planes to India\'s Jet Airways for a lower price than a competing bid, saying Jet offered the best overall bid of the eight interested companies.

SAA leased 3 Airbus A340-300E aircraft to Jet Airways from April this year for two years to help raise cash.

The Sunday Times newspaper alleged that the national carrier had agreed to a monthly payment of USD$925,000 per aircraft compared with USD$1.15 million that was offered by rival Air Sahara.

The decision meant that the projected total lease revenue was USD$110 million lower than the original USD$450 million.

(Reuters)

[PAXboy]

The same Jet Airways that have been accused in the U.S.A of having al-Qauda links! Did you not know that EVERY non-American airline has links to 'al-kaider'? That way, the FBI stand a better chance of being correct. :rolleyes:

[Zedd]

If all that they say is true and the airline is starting to make a profit then I think it is time that all those negative people out there swallow their words and say something good about what is happening.