African Pilot Aviation News 03 2015 - Monday 19 January 2015 “The world will not be destroyed by those who do evil, but by those who watch and do nothing” Albert Einstein African Pilot’s February 2015 edition SAA 90 Day Action Plan update SAA has ushered in the New Year with renewed resolve and focus to stabilise the business. The 90 Day Action Plan, a road map designed to return SAA to full implementation of its Long-Term Turnaround Strategy, is on target in terms of rollout and active engagement across all levels of the company. “The 90 Day Action Plan is proceeding to schedule,” says Acting SAA CEO Mr. Nico Bezuidenhout. Tasks completed already include a review of the SAA long-haul international network as well as a re-evaluation of fleet requirements. In December the airline already announced its new route between Johannesburg and Abu Dhabi along with a deeper commercial relationship with Etihad through codeshare network extensions and upped frequencies to key African destinations. “Network optimisation is key and we expect to make more announcements regarding commercial efficiencies in the near future.” Governance is one of the six critical interventions of the 90 Day Action Plan. “There has also been a significant drive toward better governance with strengthened interaction between the Board and management an emphasis. There has also been resolution, in agreement with National Treasury, in terms of scheduling the postponed 2014 Annual General Meeting for late January, early February.” Implementation of the 90 Day Action Plan is driven by the SAA ‘War Cabinet’. This small group of key senior executives in the business plays a critical role in the implementation process of the Plan, with close monitoring by the newly constituted Board. Its twice-weekly meeting cycle ensures implementation feedback from across the business, while a weekly feedback session reports into a National Treasury Technical Team. “The interventions managed by the ‘War Cabinet’ are directly linked to business deliverables to steer the company back onto a path of sustainability as outlined in the Long-Term Turnaround Strategy. SAA is serious about rebuilding commercial sustainability and we will achieve our objectives. SAA means business,” says Mr. Bezuidenhout. As a consequence of the on-cue implementation of the 90 Day Action Plan, the Long-Term Turnaround Strategy is reenergised and the business is receiving full support from its Shareholder and close guidance from its Board of Directors. The 90 Day Action Plan comprises six main areas of focus as approved by the newly constituted Board: 1) Immediate address the airline’s liquidity position, on-going solvency and medium-term funding requirements. Amongst the interventions are: a) Addressing the solvency and liquidity of the business and engage with its Shareholder and other Stakeholders to ensure going concern status is maintained. b) Immediate review of the SAA network to stem losses. c) Focus on working capital optimisation. d) Renew cost compression efforts and expedite LTTS implementation that will immediately impact the income and CASH flow statements. 2. Immediate investigation of options to future-fund the business: The initiation of a process to investigate and determine options for future-funding the business. 3. Substantial focus on Governance defects and remedies: Immediate investigation and correction of any governance failures within the business. This includes a wide-ranging review of processes and command and control structures within SAA with particular reference to the implementation of LTTS. 4. Legal and high-level governance: An immediate review of all contractual burdens and governance implications or defects within the legal framework of the company. This includes the review of onerous agreements, correction thereof and other matters that impact the framing of remedial activity; the re-establishment of foundation laying for LTTS implementation within a tight governance environment. 5. Reorganisation and optimisation of assets: Examination of all assets in the business and reorganisation thereof in terms of the requirements of the LTTS. Further optimisation will occur in line with the approved interventions per the LTTS. 6. Improved Communication: SAA will reengineer its internal and external communication efforts to effectively communicate with all direct and indirect stakeholders and South African citizens, particularly with reference to the implementation of the 90 Day Action Plan as well as the LTTS. Editor comments: Congratulations to Mr Bezuidenhout for recognising many of the shortfalls of the business of an airline such as SAA and well done on recognising that SAA’s media and marketing department requires a significant overhaul in order to become efficient in the future. However the root of the problem is that SAA is over staffed and until 1.5 to 2 to thousand people are removed from the payroll, the problem of loss making is likely to continue. For example why does SAA have a PR department and an out sourced PR company, which for the record is pretty inefficient? The following figures are a clear indication that SAA is PRESENTLY over staffed when compared to other successful international airlines: 1) QANTAS (Australian) 32 500 employees with a total of 252 aircraft = 129 employees per aircraft 2) American Airlines 87 897 employees with a total of 618 aircraft = 142 employees per aircraft 3) Delta Airlines 106 216 employees with a total of 722 aircraft = 147 employees per aircraft 4) British Airways 36 832 employees with a total of 238 aircraft = 154 employees per aircraft 5) United Airlines 115 149 employees with a total of 710 aircraft = 162 employees per aircraft 6) South African Airways 10 900 employees with a total of 58 aircraft = 190 employees per aircraft Numbers above are subject to change depending on latest figures. Cemair announces scheduled flights to Bloemfontein Commuter and regional carrier, CemAir (IATA code 5Z) is delighted to announce the commencement of its scheduled flight service between Johannesburg’s OR Tambo International Airport and Bloemfontein’s Bram Fischer Airport. From 23 February 2015 CemAir will offer 12 return flights per week between the two destinations. Weekday flight times will suit the needs of business travellers with a morning and evening return flight and an afternoon return flight will be offered on weekends. The route will be flown in a Cemair-owned Bombardier CRJ. This 50 seat jet offers unparalleled quietness and comfort in its class. The flight will be 50 minutes from gate to gate with a flying time of around 35 minutes. Flights will depart from and arrive at OR Tambo’s Terminal B. CemAir is an established scheduled airline operator currently flying from Johannesburg to Sishen, Margate and Plettenberg Bay as well as between Cape Town and Plettenberg Bay. The company was established in 2006 and owns a fleet of 20 aircraft of Beech 1900D’s, Bombardier Dash 8 and Bombardier CRJ aircraft. Bookings can be made online at flycemair.co.za or through your travel agent. Airbus to place production emphasis on A320 Family According to a report from Reuters, soft demand for the Airbus A330 has Airbus admitting that it may slow production of the larger airliner in favour of the popular A320 line. Airbus is likely to raise production rates on the single-aisle airliner sooner rather than later and the European plane maker did best rival Boeing in orders in 2014 but lagged behind in deliveries, according to the report. Speaking at an annual news conference, Airbus Fabrice Bregier said that decisions on boosting A230 production and potential cuts in A330 production will both come in the next few months. Meanwhile, Bregier defended the mammoth A380, which has not been as popular with airlines as the company had anticipated. “The best days of the A380 are ahead, he said. Boeing counters that airlines prefer smaller airliners that carriers can fill more easily. And while there is no serious discussion of cancelling the A380 programme, as was hinted at in unofficial remarks by the company finance director in December, Breiger said that the super-jumbo jet is ‘not an icon’ and that any decision on the airplane will be strictly grounded in business. Aviation Humour The reason Politicians try so hard to get re-elected is that they would ‘hate’ to have to make a living under the laws they’ve passed. Weekly News from African Pilot Should you happen to miss out on any edition of African Pilot’s weekly aviation news briefs, please visit the website: africanpilot.co.za and click on the Aviation News link on the front page. All past weekly African Pilot Aviation News briefs have been archived on the website. Until next week, please be ‘Serious about flying’. Athol Franz (Editor) African Pilot ‘Serious about flying’.
Posted on: Tue, 20 Jan 2015 06:28:50 +0000
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