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Stagnation At South African Airways  
User currently offlineETStar From Canada, joined Jan 2004, 2103 posts, RR: 7
Posted (9 years 2 months 1 week 19 hours ago) and read 4289 times:

So, we all know what Africa looks like [you'd better bring up your map otherwise] and we also know where in Africa South Africa is. Its national carrier, SAA, serves a good number of cities in Africa, but as we all know, it would mostly have to rely on O&D pax because of its geographic location.

What do you think this airline would have to do in order to survive in the long run? While its plans around the begining of this millenium were to set up various hubs in Africa to address this mere fact, not much action has been taken: its 'hub' at Dar Es Salaam has no action [even though it paid $20 Million for TC], and it's plan for a West African hub is really based on the cooperation with a young, somewhat healthy airline [Air Sénégal] that is controlled by a third airline [Royal Air Maroc], and whose future looks quite bright, and would probably not have SAA tag along if it can do well in its own turf alone. And then we know what the deal at LOS and ACC is, where the light is no longer shining on SAA.

So what happens when this airline is affected by up and coming airlines from all over Africa that compete with it directly, on the O&D? And then what happens when the same airlines are strong enough to take on the O&D between, say, Europe and South Africa?

25 replies: All unread, showing first 25:
 
User currently offlineLeskova From Germany, joined Oct 2003, 6075 posts, RR: 70
Reply 1, posted (9 years 2 months 1 week 13 hours ago) and read 4092 times:

While some infantile persons may think that a fleet or livery change is what SAA needs, it quite obviously is not. Neither is their current fleet anything even resembling ineffective, nor could a different fleet currently offer SAA any reasonable advantage.

First of all, while technically true that SAA needs to rely on O&D, the markets that they serve can actually easily sustain the flights being offered; most markets are actually a bit underserved instead of being flooded with capacity - keeps the planes nice and full, and, much more important, the yields up.

The difference between having hubs throughout Africa or not isn't the difference between SAA surviving or not: it's the difference between SAA staying roughly at the size they're at now, or growing bigger.

As for routes, I'd say the most likely candidates are further Star Alliance hubs - the US is more than taken care of, no further flights are required; I doubt that South America will see much more than it gets right now, the flights to GRU have good connections to everywhere else through RG.

Two areas where I do see likely growth are Asia, also again primarily Star hubs - currently, SAA has very few routes to Asia, so I'd expect growth there; and, to a lesser extent, Australia and New Zealand.

Growth in other areas will, most likely, be confined to either adding frequencies (where flights are not daily) or adding capacity.

Regards,
Frank



Smile - it confuses people!
User currently offlineJGPH1A From , joined Dec 1969, posts, RR:
Reply 2, posted (9 years 2 months 1 week 11 hours ago) and read 4006 times:

1. I would expect expansion into Asia - flights to China and (if the can get slots) Japan. Plus back to BKK (codeshare TG) and SIN (codeshare SQ, poss on SQ's existing flights).

2. Who knows what will happen about DAR and TC - seems like a dead end at the moment, I don't know why.

3. West Africa seems like a lost cause as well, what with FAA restrictions and all the other everyday fun of operating in the worlds most corrupt region. Possibly they should look at ABJ (after the French have finished blowing it up) as a potential hub. After all Air Afrique is long gone, and there is market there.

4. SAA have MILES the best infrastructure, best systems, best aircraft, best maintenance and best product of any airline in Africa - they are the only truly major airline on the continent, and are likely to remain so for some time to come. KQ and ET are expanding, sure, but will they ever be truly global like SA ? I doubt it.


User currently offlineAerokiwi From New Zealand, joined Jul 2000, 2684 posts, RR: 4
Reply 3, posted (9 years 2 months 1 week 10 hours ago) and read 3960 times:

It's such a shame that SAA has fuddled around with air Tanzania. The country has spectacular tourism and business potential and has a large ethnic sub-continental population in Dar, making it an ideal hub for flights to india and the Middle East.

In its own right, Air Tanzania should be flying (or at the very least, codesharing) to several European, African and Indian (Mumbai) cities. The demand is there, as is the ened for a radical improvement of domestic schedules.

SAA is totally wasting the opportunity it has with Air Tanzania and just makes the airline look like more of a didle-around company than ever (recall the ridicuolous Boeing-Airbus-Boeing-no wait!! Airbus fleet plans).

Get your act together SAA.


User currently offlineJeffrito From United States of America, joined May 2001, 133 posts, RR: 0
Reply 4, posted (9 years 2 months 1 week 10 hours ago) and read 3927 times:

What's the scoop with Ethiopian? Do they continue to be profitable?

User currently offlineACVitale From United States of America, joined Aug 2001, 922 posts, RR: 11
Reply 5, posted (9 years 2 months 1 week 9 hours ago) and read 3897 times:

Ethiopian is profitable. It is the most profitable airline in Africa. The infrastructure of ET is in my opinion better then the SAA infrastructure. Not to mention that SAA is losing more money then most carriers. I think that after everything they stand to lose nearly $3.0 B USD in between the currency hedge and the end of Q2. I could be wrong but those are the rumors. Compare that to the $64M USD profit at ET.

User currently offlineJGPH1A From , joined Dec 1969, posts, RR:
Reply 6, posted (9 years 2 months 1 week 9 hours ago) and read 3880 times:

Quoting ACVitale (Reply 5):
The infrastructure of ET is in my opinion better then the SAA infrastructure.

Hmmm - I have my doubts. SAA has the biggest engineering base in the Southern Hemisphere (at least it used to be), and their INV/RES/DCS, CRM and Decision Support systems are way ahead of ET's (SITA Gabriel - don't make me laugh ! Big grin )


User currently offlineDkny From Ethiopia, joined Mar 2004, 714 posts, RR: 2
Reply 7, posted (9 years 2 months 1 week 9 hours ago) and read 3879 times:

Ethiopian is about to go Daily into Tanzania

http://allafrica.com/stories/200505250440.html


User currently offlineB747-437B From , joined Dec 1969, posts, RR:
Reply 8, posted (9 years 2 months 1 week 9 hours ago) and read 3877 times:

Quoting JGPH1A (Reply 6):
SAA has the biggest engineering base in the Southern Hemisphere

Ethiopia lies in the Northern Hemisphere.  Wink


User currently offlineJGPH1A From , joined Dec 1969, posts, RR:
Reply 9, posted (9 years 2 months 1 week 9 hours ago) and read 3848 times:

Quoting B747-437B (Reply 8):
Ethiopia lies in the Northern Hemisphere.

Duh ! No really ? Perhaps my meaning was not communicated with sufficient unambiguity, but by stating as I did that SAA have (or had) the largest maintenance base in the Southern Hemisphere, the implication was that it is bigger than anything ET has, regardless of it's current hemispherical location.

I shall endeavour to attain greater clarity in future.

 Smile


User currently offlineAerokiwi From New Zealand, joined Jul 2000, 2684 posts, RR: 4
Reply 10, posted (9 years 2 months 1 week 8 hours ago) and read 3777 times:

Keep working on that clarity JGPH1A because it didn't compare the airlines at all. SAA has the biggest mx facility in the southern hemisphere? Great, but ET is in the Northern. So geography is hardly useful as a comparison in that sense.

And come to think of it, are you talking about the African continent or the entire Southern hemisphere? Because I'm sure SQ and QF have larger mx facilities.

An odd way of expressing yourself.


User currently offlineGoodday From Japan, joined May 2005, 55 posts, RR: 0
Reply 11, posted (9 years 2 months 1 week 8 hours ago) and read 3770 times:

Is their decision to expand seat pitch in economy class to 33 inch pitch paying off?

User currently offlineJoKeR From Serbia, joined Nov 2004, 2235 posts, RR: 9
Reply 12, posted (9 years 2 months 1 week 8 hours ago) and read 3763 times:

Quoting ACVitale (Reply 5):
The infrastructure of ET is in my opinion better then the SAA infrastructure.

While I respect your opinion, I find it hard to believe that Ethiopian's infrastructure is better than that of SAA.

Can you substantiate your claim please?



Kafa, čaj, šraf?
User currently offlineACVitale From United States of America, joined Aug 2001, 922 posts, RR: 11
Reply 13, posted (9 years 2 months 1 week 8 hours ago) and read 3762 times:

I think I need to clarify.....

ET is in MY OPINION a better overall infrastructure base....

Why? ET does not have infrastructure in areas that are not needed. (Specifically IT where they outsource...) However they have similar infrastructure in avionics, engine overhaul, airframe and simulators.

Granted having been to tour both SAA has much prettier facilities with new BMW and Mercedes company cars everywhere. ET has Toyota vans and older vehicles but the facilities are similar and ET is making money.


User currently offlineJGPH1A From , joined Dec 1969, posts, RR:
Reply 14, posted (9 years 2 months 1 week 8 hours ago) and read 3749 times:

Quoting Aerokiwi (Reply 10):
And come to think of it, are you talking about the African continent or the entire Southern hemisphere? Because I'm sure SQ and QF have larger mx facilities.

As far as the African continent goes, SAA's base at JNB is by far the biggest. Re SQ and QF, I think SQ is (technically) in the northern hemisphere (but not by much IIRC). The reason I said I'm not sure if SA's mx base is STILL the biggest in the Southern Hemisphere is because QF's might be bigger now.


User currently offlineJoKeR From Serbia, joined Nov 2004, 2235 posts, RR: 9
Reply 15, posted (9 years 2 months 1 week 8 hours ago) and read 3752 times:

Quoting ACVitale (Reply 13):
ET does not have infrastructure in areas that are not needed

Huh? Okay, I give up, please elaborate...

Quoting ACVitale (Reply 13):
SAA has much prettier facilities with new BMW and Mercedes company cars everywhere. ET has Toyota vans and older vehicles but the facilities are similar and ET is making money.

Don't really see how that is THE reason for SAA's "failure", but may I remind you that SAA's fleet is also flashy and new... see where I'm getting at? Big grin



Kafa, čaj, šraf?
User currently offlineHardiwv From Brazil, joined Oct 2004, 8780 posts, RR: 50
Reply 16, posted (9 years 2 months 1 week 8 hours ago) and read 3734 times:

Quoting JGPH1A (Reply 6):
SAA has the biggest engineering base in the Southern Hemisphere

Could you explain and provide factual information?

Quoting Leskova (Reply 1):
I doubt that South America will see much more than it gets right now, the flights to GRU have good connections to everywhere else through RG

SA operations in GRU are very profitable. Recently SA replaced the A343 with the A346 daily. Demand, loads and yields are very strong. I expect SA in the future to launch a twice daily flight to GRU or start a new destination such as GIG or EZE.

I assume that in the long term SA's JNB hub will be the biggest hub for travel between the Southern Hemisphere (e.g. from South America to Africa to South Asia). JNB is a perfect hub, for example, for flights Brazil-India, two huge emerging markets. I certainly see an important role for JNB in the future and SA will be in perfect position to seize this opportunity!

Rgs,


User currently offlineAndz From South Africa, joined Feb 2004, 8443 posts, RR: 10
Reply 17, posted (9 years 2 months 1 week 8 hours ago) and read 3721 times:
Support Airliners.net - become a First Class Member!

Quoting JoKeR (Reply 15):
SAA's "failure",

you wanna expand on your choice of words? Failure implies that they are out of business.



After Monday and Tuesday even the calendar says WTF...
User currently offlineJoKeR From Serbia, joined Nov 2004, 2235 posts, RR: 9
Reply 18, posted (9 years 2 months 1 week 8 hours ago) and read 3716 times:

Ahhhhmmm Andz,

Placing words in between apostrophes implies sarcasm...



Kafa, čaj, šraf?
User currently offlineJGPH1A From , joined Dec 1969, posts, RR:
Reply 19, posted (9 years 2 months 1 week 8 hours ago) and read 3711 times:

Quoting Hardiwv (Reply 16):
Could you explain and provide factual information?

From SAA's website regarding the SAA Technical's facilities...

Total SAT area: 65 Hectares.
Hangars: 84 45m2.
Workshops: 71058m2.
Offices: 23 876m2.
Stores: 21960m2.
Hard Standing Area: 189 000m2.

I tried to find similiar info for QF, but was unable. Perhaps someone has their stats ?


User currently offlineLeskova From Germany, joined Oct 2003, 6075 posts, RR: 70
Reply 20, posted (9 years 2 months 1 week 2 hours ago) and read 3591 times:

Quoting Aerokiwi (Reply 10):
And come to think of it, are you talking about the African continent or the entire Southern hemisphere? Because I'm sure SQ and QF have larger mx facilities.

I can see why you're mentioning QF - but SQ is neither on the African continent nor on the Southern hemisphere... it may not be by much, but Singapore is on the Northern hemisphere.

Quoting Hardiwv (Reply 16):
SA operations in GRU are very profitable. Recently SA replaced the A343 with the A346 daily. Demand, loads and yields are very strong. I expect SA in the future to launch a twice daily flight to GRU or start a new destination such as GIG or EZE.

You're right, of course - I wasn't aware that the flights were daily (I still had something around 4-5 flights per week in my mind), and when I read your comment, I remembered that the flights already had switched to the -600.

If loads and yields do stay strong, I, too, wouldn't be surprised to see either GRU getting a second flight or GIG a daily - aircraft availability permitting, which seems to be the main limiting factor for SAA these days.

Would you expect to see them opening GIG before doubling GRU, or the other way around? Regarding EZE, I'm not sure if SAA will go there anytime soon, because - at least from what I've heard - the larger part of pax coming from EZE through GRU onto SAA are leisure pax; but I heard that a several months (almost a year) ago, so I'm not certain if that's still accurate.

Regards,
Frank



Smile - it confuses people!
User currently offlineETStar From Canada, joined Jan 2004, 2103 posts, RR: 7
Reply 21, posted (9 years 2 months 1 week 2 hours ago) and read 3576 times:

Quoting JGPH1A (Reply 2):
4. SAA have MILES the best infrastructure, best systems, best aircraft, best maintenance and best product of any airline in Africa - they are the only truly major airline on the continent, and are likely to remain so for some time to come. KQ and ET are expanding, sure, but will they ever be truly global like SA ? I doubt it.

Such a disservice to Ethiopian, Kenya and Egypt Air, to name a few airlines that are all truly major, and global airlines in the continent. ET and KQ each serve cities that are comparable to SA, if not more. They are better situated to take advantage of transiting pax from east/west, north/south than SA. They have a lot more room for growth than SA. They may not have as much resources as SA (in terms of $$) but given that situation, coupled with alliances (KQ is already going in that direction), there is much much more room for growth for these airlines...

Quoting JGPH1A (Reply 6):

Hmmm - I have my doubts. SAA has the biggest engineering base in the Southern Hemisphere (at least it used to be), and their INV/RES/DCS, CRM and Decision Support systems are way ahead of ET's (SITA Gabriel - don't make me laugh ! Big grin )

Sure ... but what does it come down to at the end? The infrastructure that you have or how much $$ you are profiting out of it? You go bankrupt and the infrastructure is gone. You don't make good use of it you're out. Other than for bragging rights, what use does it currently have given SA's current state? How well are those decision support systems working for that airline?


User currently offlineAerokiwi From New Zealand, joined Jul 2000, 2684 posts, RR: 4
Reply 22, posted (9 years 2 months 6 days 15 hours ago) and read 3473 times:

Ok, whoops, my error. Singapore is in the northern hemisphere.

But don't let that divert from the slack performance of SAA over the past 5 years. I was reading an inflight magazine of theirs from 2 years ago where the CEO was advocating how great the overbooknig system is and that passengers should be grateful for it. If that's the attitude of this carrier, then that says it all really. Though I suspect this CEO has been replaced following recent problems. The article was from 2003.


User currently offlineJGPH1A From , joined Dec 1969, posts, RR:
Reply 23, posted (9 years 2 months 6 days 13 hours ago) and read 3490 times:

Quoting ETStar (Reply 21):
Such a disservice to Ethiopian, Kenya and Egypt Air, to name a few airlines that are all truly major, and global airlines in the continent. ET and KQ each serve cities that are comparable to SA,

ET, KQ and MS are neither "major" nor "global". Do any of them serve Latin America ? No. Do any of them serve Australasia ? No. KQ doesn't even serve North America. How is that "global" ?

In terms of "major", in terms of passengers boarded in 2003

SA = 6,550,970 (44 in IATA rankings)
MS = 4,210,814 (65)
KQ = 1,670,086 (103)
ET = 1,147,329 (117)

Comparable cities ? In terms of international service

SA (include SAX but not codeshare)

Africa (27) - WDH, WVB, LAD, GBE, MSU, MTS, MPM, VFA, BUQ, HRE, LUN, SID, LVI, FBM, FIH, ABJ, ACC, LOS, DKR, KGL, LLW, BLZ, BEW, MRU, NBO, DAR, ZNZ

Outside Africa (12) - MXP, FRA, CDG, ZRH, LHR, JFK, IAD, ATL, GRU, HKG, PER, BOM

ET

Africa (20) - ABJ, ACC, LOS, BKO, NDJ, JNB, LLW, DAR, JRO, DLA, FIH, BZV, LAD, HRE, BJM, KGL, KRT, JIB, CAI, LFW

Outside Africa (14) - LON, FRA, FCO, CDG, STO, IAD, BKK, PEK, HKG, TLV, BOM, DEL, JED, DXB

KQ (excluding codeshare)

Africa (23) - JNB, CPT, HRE, DLA, FIH, ACC, LOS, ABJ, DKR, BKO, ADD, KRT, JIB, SEZ, LUN, LLW, ZNZ, CAI, FBM, MPM, BJM, KGL, DAR

Outside Africa (6) - LON, AMS, BKK, HKG, BOM, DXB

MS (excluding codeshare)

Africa (12) - JNB, ACC, LOS, NBO, ADD, KRT, ASM, TIP, CMN, TUN, BEN, ALG

Outside Africa (32) - LON, PAR, FCO, MAD, BCN, ATH, IST, AMM, KWI, JED, RUH, DXB, AUH, BAH, MCT, DAM, MXP, VIE, GVA, BER, MUC, BUD, LCA, ALP, SAH, BOM, BKK, TYO, NYC, YMQ, MOW, DOH.

MS does well, mostly because of a lot of flights to Middle Eastern cities and Europe (being much closer), but true long haul is much more limited. ET has better service to Asia than SA, but once SA joins Star, this could easily change.


User currently offlineHardiwv From Brazil, joined Oct 2004, 8780 posts, RR: 50
Reply 24, posted (9 years 2 months 6 days 12 hours ago) and read 3442 times:

Quoting JGPH1A (Reply 19):
tried to find similiar info for QF



Quoting Leskova (Reply 20):
Would you expect to see them opening GIG before doubling GRU, or the other way around?

The current trend of foreign airlines operating in Brazil is to double GRU instead of starting GIG (see SA)">CO, SA)">DL, LH). However, GIG got a boost after flight relocation from SDU to GIG and has become a major hub again. I think we would first have to wait and see how GIG develops further. SA)">DL will start ATL-GIG nonstop in Oct/05. [as a side note, TAAG operates LAD-GIG with the B747 and does not serve GRU].

Quoting JGPH1A (Reply 23):
ET, KQ and MS are neither "major" nor "global". Do any of them serve Latin America ?

MH is global, and flies KUL-JNB-CPT-EZE.

Quoting JGPH1A (Reply 23):
In terms of "major", in terms of passengers boarded in 2003

SA = 6,550,970 (44 in IATA rankings)
MS = 4,210,814 (65)
KQ = 1,670,086 (103)
ET = 1,147,329 (117)

RG, located in the Southern Hemisphere, is probably the biggest airline, certainly the biggest in Latin America. In 2004 RG carried over 14 million pax, 30 in IATA rankin, and in second comes TAM with about 11 million carried pax (and note that TAM is mainly a domestic airline). RG also has the biggest aircraft Maintenance and Engineering center in the Southern Hemisphere (over 4,000 staff work at VEM in POA and GIG, of these about 2,000 are engineers). http://www.varigvem.com/VME/VEM_Index.htm

Rgs,


User currently offlineJGPH1A From , joined Dec 1969, posts, RR:
Reply 25, posted (9 years 2 months 6 days 11 hours ago) and read 3402 times:

Quoting Hardiwv (Reply 24):
MH is global, and flies KUL-JNB-CPT-EZE.

I think we're talking about African airlines, not the whole Southern Hemisphere.

Quoting Hardiwv (Reply 24):
RG also has the biggest aircraft Maintenance and Engineering center in the Southern Hemisphere

Thanks for the info - I didn't think RG would have such a large mx base - you learn something new every day !


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