South African Airways' turnaround strategy announced

South Africa's Minister of Public Enterprises Malusi Gigaba announced (10-Sep-2013) South African Airways' (SAA) long-term turnaround strategy. The strategy will include four corporate plans over 12 years. The strategy focusses on managing the airline's high-cost structure, improving yield, making better use of its assets, optimising operational efficiencies of strategic routes, prioritising fleet renewal and strategic fleet acquisitions to grow revenues and implementing cost-saving measures. Consolidation of the carrier's network will form a critical component of the plan over the next 18 months. The airline will minimise its loss-making international network and suspend routes to reduce operational losses, focussing instead on its profitable domestic and African regional network. The airline will also focus on cost containment and improvement of its debt-to-equity ratio in the short-term. Capitalisation requirements are being reviewed and developed in conjunction with the National Treasury. The strategy includes the following aims:

• Instil a group vision and mission to support the country's development agenda, achieve and maintain commercial sustainability and foster performance excellence;
• Create an integrated airline group, SAA Group Holdings, incorporating SAA, Mango and SA Express under a single holding company structure to improve asset utilisation, operational efficiency and capital allocation;
• Implement a new network, alliance and fleet strategy to develop SAA as a full-service premium carrier, Mango as a LCC and SA Express as a regional feeder airline. This plan will allow the group to meet current and projected demand, produce capacity through alliances and implement integrated fleet planning;
• Develop a 'Whole of State Aviation Framework' to ensure consolidated policy approach to aviation in South Africa to maximise the growth potential of its airlines;
• Implement new human capital development and business structure interventions. [more - original PR]