South African Airways is striving to return to profit in three years by reducing the size of the network and transferring planes to its low-cost carrier as Chief Executive Officer Vuyani Jarana embarks on a recovery plan.
A turnaround of the state-owned airline is among the more urgent priorities of newly appointed Finance Minister Nhlanhla Nene, who is seeking to avoid a repeat of the government bailout approved by his predecessor Malusi Gigaba last year. The carrier’s net loss widened more than threefold to R5.6-billion in fiscal 2017 and the company may not be able to operate as a going concern, the Auditor General said last week.
“We now have a clear strategy and clear path to profitability defined by the board,” said Jarana, who became SAA’s first permanent CEO in three years when he started work in November. “We are looking at a three-year window to get to a break-even point. We continue to revise the strategy as we see more opportunities.”
SAA will continue to cut or reduce loss-making routes and transfer unneeded planes to profitable low-cost carrier Mango Airlines, Jarana said. The company halved the number of flights from Johannesburg to London’s Heathrow airport last month, and in 2017 canceled or reduced the frequency of flights to African capitals including Luanda, Abuja and Kinshasa.