South African Airways to lease six new A330-200 aircraft
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South African Airways seeks regional growth and new partnerships, but outlook remains bleak. UPDATE
South African Airways (SAA) is again looking at opportunities for new partnerships and network expansion. SAA is now re-engaging with Etihad following an unsuccessful initial partnership and is keen to launch new routes after the delivery of its first two A330-300s in 4Q2016.
Any growth, however, is unlikely to be profitable until SAA addresses its longstanding challenges. The airline has still not fully implemented its previous turnaround plan and urgently needs yet another capital injection.
A full and deep restructuring is required but seems impossible in the current political environment. Repeated government meddling has put SAA in an extremely challenging situation. The airline is in dire straits, and its outlook remains bleak.
Hawaiian Airlines: cost creep casts a slight shadow over a favourable PRASM performance
Hawaiian Airlines’ geography has been a boon for the airline throughout 2016 as the company’s unit revenue performance has outpaced that of its peers. Hawaiian has benefitted from immunity to the lack of pricing traction in many domestic markets on the US mainland, and rational capacity deployment on is largest North American routes.
The company expects to continue posting a unit revenue outperformance for the remainder of 2016, driven by still favourable capacity trends in its markets. Hawaiian’s own capacity growth is expected to fall between 3% and 4% for 2016, and remain in the low- to mid- single-digit range for the foreseeable future.
Although Hawaiian continues to outperform the industry in unit revenue, the company is facing inflated unit costs in 2016 driven by several factors, including increased compensation and technology investments. The airline is also in the middle of pilot negotiations, and has acknowledged additional cost headwinds once a new collective bargaining agreement is reached.