Gunship
12th Dec 2002, 09:54
News 24 (http://www.news24.com/News24/Finance/Companies/0,4186,2-8-24_1296093,00.html)
Johannesburg - South African Airways posted a first-half profit in the 2002 financial year - its first since 1999 - its chief executive said, giving Africa's biggest carrier firepower to grow its regional dominance.
Writing in the airline's latest in-house newsletter, Andre Viljoen said cost cutting measures had resulted in an interim operating profit of R169m.
The flag carrier (SAA) had budgeted for a R101m operating loss for the 2002 financial year, which ends in March 2003. It recorded a R699m operating loss in 2001.
"We have done it. For the first time since corporatisation, the airline has made an operating profit," said Viljoen.
"SAA has managed to control costs and show an operating profit - before the sale of aircraft - of R169m for the six months of the (2002) financial year."
The airline is wholly owned by the government, after it bought back Swissair's 20% stake following the collapse of the Swiss carrier early this year.
"Staff's continued dedication, focus and effort has turned the tide, despite the international meltdown in the aviation industry," said Viljoen.
Profits are rare in the industry. On Monday US carrier United Airlines filed for bankruptcy, the largest ever in the global airline industry, after high costs and low airfares left the world's number two carrier with too much debt and not enough cash.
Viljoen also said SAA would change its management structure to make it more integrated. It would create a deputy chief executive position in the new year.
"As part of the realignment process, we have benchmarked with other airlines such as Delta, Singapore (Airlines) and Lufthansa to find the best solution," Viljoen said.
Dominating African skies
SAA, which, as well as cost cutting has benefited from buoyant regional traffic, has made various moves recently in its ambition to grow its dominance of the African skies.
Earlier this year it ordered 41 Airbus planes at a catalogue price of around US$3.5bn, to be delivered over 10 years. The first plane is due to arrive in February next year.
Viljoen said he hoped the purchases would help sustain the airline's strong income base in the face of increased competition from low cost fare operators.
Last week SAA acquired 49% of the state-owned Air Tanzania for $20m.
And at the weekend it entered into a code-sharing agreement with Mozambique's LAM, which industry observers said suggested that SAA could bid for the airline, slated for privatisation. The Mozambican government wants to sell 51% of LAM, but is yet to invite bids.
SAA has also recently increased flights to east and west Africa, with new routes to Addis Ababa and Senegal. It currently flies to nearly 700 destinations around the globe with its alliance partners.
Johannesburg - South African Airways posted a first-half profit in the 2002 financial year - its first since 1999 - its chief executive said, giving Africa's biggest carrier firepower to grow its regional dominance.
Writing in the airline's latest in-house newsletter, Andre Viljoen said cost cutting measures had resulted in an interim operating profit of R169m.
The flag carrier (SAA) had budgeted for a R101m operating loss for the 2002 financial year, which ends in March 2003. It recorded a R699m operating loss in 2001.
"We have done it. For the first time since corporatisation, the airline has made an operating profit," said Viljoen.
"SAA has managed to control costs and show an operating profit - before the sale of aircraft - of R169m for the six months of the (2002) financial year."
The airline is wholly owned by the government, after it bought back Swissair's 20% stake following the collapse of the Swiss carrier early this year.
"Staff's continued dedication, focus and effort has turned the tide, despite the international meltdown in the aviation industry," said Viljoen.
Profits are rare in the industry. On Monday US carrier United Airlines filed for bankruptcy, the largest ever in the global airline industry, after high costs and low airfares left the world's number two carrier with too much debt and not enough cash.
Viljoen also said SAA would change its management structure to make it more integrated. It would create a deputy chief executive position in the new year.
"As part of the realignment process, we have benchmarked with other airlines such as Delta, Singapore (Airlines) and Lufthansa to find the best solution," Viljoen said.
Dominating African skies
SAA, which, as well as cost cutting has benefited from buoyant regional traffic, has made various moves recently in its ambition to grow its dominance of the African skies.
Earlier this year it ordered 41 Airbus planes at a catalogue price of around US$3.5bn, to be delivered over 10 years. The first plane is due to arrive in February next year.
Viljoen said he hoped the purchases would help sustain the airline's strong income base in the face of increased competition from low cost fare operators.
Last week SAA acquired 49% of the state-owned Air Tanzania for $20m.
And at the weekend it entered into a code-sharing agreement with Mozambique's LAM, which industry observers said suggested that SAA could bid for the airline, slated for privatisation. The Mozambican government wants to sell 51% of LAM, but is yet to invite bids.
SAA has also recently increased flights to east and west Africa, with new routes to Addis Ababa and Senegal. It currently flies to nearly 700 destinations around the globe with its alliance partners.