SAA to spend up to R70bn for long-haul aircraft

2013-06-03 14:59

South African Airways plans to spend between R40 billion to R70 billion for 25-30 long-haul aircraft and has mostly been looking at the Boeing 787 and Airbus A350, a senior official has said.

State-owned SAA expects deliveries to start from 2017, Nico Bezuidenhout, who has been acting chief executive since February, told Reuters.

Dogged by boardroom strife and massive losses, SAA hopes fuel efficient aircraft will help defray expensive energy costs, Bezuidenhout said.

Meanwhile, Public Enterprises Minister Malusi Gigaba said today South Africa’s air transport industry is a key employer, providing 200 000 direct and indirect jobs.

“These multiplier effects of the air transport industry lift various households out of poverty,” Gigaba said in a speech prepared for delivery at the 69th International Air Transport Association’s (IATA’s) annual general meeting in Cape Town.

“Air transport is crucial to ensuring sustainable growth in Africa as it has a significant impact on the global economy and the way people live.”

He said aviation had always been seen as a strategic activity, needing the attention of the highest level of government.

Airlines, government, and the IATA were constantly challenged and needed to adapt to new business models, economics of travel, and demographic realities.

“The South African government realises the importance of aviation to its economic development and has in the past ensured increased support for the industry,” Gigaba said.

It was a sad fact that Africa lacked a dynamic and systematic transport mode to connect the continent and make it possible to trade and travel for leisure. However, the continent presented great opportunities for growth in the industry.

The economic changes were driven by factors including a growing middle-class which sustained demand for goods and services.

“While the African market has much economic potential, it is impeded by a number of structural obstacles which still need urgently to be addressed,” said Gigaba.

These included limited or poor airport infrastructure, high user charges, the limited capacity of human resources, the perception of poor safety management, and under-investment in the latest safety technology.

Despite these problems, African and international carriers had been pursuing the opportunities found in Africa.

Gigaba said SAA, Ethiopian Airlines, and Kenya Airways were the largest carriers in Africa, each executing distinct business strategies.

“It might soon be necessary, though, that these airlines pursue collaborative efforts in order to address this glaring market failure. It is accordingly important that all of these airlines be embedded in the African continent and provide an efficient, sustainable, and safe mode of travel on the continent.”

Gigaba called for more airlines, especially low-cost carriers, to enter Africa. As the continent grew it would need more efficient and safe air transport, he said.

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