Hanekom: Profitable SAA restarting intercontinental routes, Brazil first

Derek Hanekom, a veteran ANC member known for his vocal criticism of the party, who chairs the interim board of SAA has expressed confidence in concluding the airline’s acquisition by the Takatso consortium by year-end. He said that SAA had returned to profitability and unveiled plans to expand its route network to 20 destinations, with the first intercontinental route set to reconnect Sao Paulo. Hanekom also emphasised the importance of clean, renewable energy for South Africa, highlighting its potential to be implemented more swiftly than nuclear energy. Furthermore, he voiced his support for the Defend Our Democracy Campaign, a counter-mobilisation aimed at safeguarding South Africa’s democracy. He spoke to Linda van Tilburg of Biznews.

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Extracts from the interview

Confident about concluding Takatso acquisition by year-end

Minister Pravin Gordhan, is quite confident that it will happen before the end of the year, but there are a few hurdles to be crossed. Some of the questions that have been asked, including in Parliament the day before yesterday at the SCOPA, the public accounts committee, was, is the money really available? But that is a guarantee. If the money isn’t made available, the deal falls through. They have made it quite clear that they will bring the capital to the table. The capital is R3 billion over three years. So, that represents the capital injection into this new company, which will still be called SAA by the way. Between now and then, the matter of the ruling of the Competition Commission has now been referred to the tribunal and the tribunal will have to make a ruling on whether it is acceptable or not, whether it accepts the recommendation of the Competition Commission, which was that the Takatso consortium had to divest itself of its 20% partner, which is Global Aviation and another 10% partner. This is only what I have read, that Global Aviation is not altogether happy about it, but that is between Takatso and Global Aviation. As far as Takatso is concerned, there are hurdles to be crossed. They have the capital and as far as the minister is concerned, he’s not expecting any major obstacles in the road to it. Realistically, assuming nothing goes wrong, I would say that within this financial year, by the end of the year or early next year, the deal will have been wrapped up and concluded. 

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Increasing the fleet, new routes, Brazil first intercontinental 

It has been reduced to quite a small airline as we stand now. But, you know, it was facing liquidation, went into business rescue, came out of business rescue. At the moment, there are seven aircraft owned or leased or owned by SAA and SAA will soon be leasing additional aircraft to bring the fleet up to effectively 13 aircraft. At the moment, we have 12 routes, two of them inside the country, domestic routes from Durban to Johannesburg and Cape Town to Johannesburg, and then quite a number of African regional routes, in fact, ten of them. So, that has been expanding over the last few months and then the plan is for that to further expand. So, by the end of this year, we anticipate having 20 routes altogether, two of which will be intercontinental routes, i.e. international routes. And the first one at this stage, it’s sort of common knowledge, although it hasn’t been publicly announced. But the first one on the cards would be the Sao Paulo route. 

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Longer term plan for SAA

We have a corporate plan, a five-year plan prepared by the board, which we replaced, but they put a lot of effort into putting together a longer-term plan. In that plan, we are actually intending to fly directly to a variety of destinations that we’re looking at at the moment. We’re looking at the London route, the Frankfurt route, the Perth route, the New York route, and possibly New York, Accra. We currently fly to Accra. So, those are all routes that are being looked at as possible routes. That is the plan. But of course, when Takata comes in, they may have their own plans. But meanwhile, we are proceeding with our plan step by step, incrementally, as I say, will be starting with the first international flight probably about two months from now and probably by the end of October, the second international flight. 

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Right-sizing completed, hiring for expansion

At the moment, SAA is more or less right-sized, except with the expansion, additional staff will have to be brought in. Right size in the sense that from an initial 11,000 odd employees, with its temporary closure, at least there were a huge number of retrenchments and it went down to in the company as a whole, not just SAA but in the air chefs and SAA technical, which are subsidiary companies, it went down to just under 2000 employees, which is where we are at the moment. But with the resumption of flights and with the acquisition of the new aircraft, we will need and are currently recruiting more pilots, in particular pilots and cabin crew. But for the rest, it’s a very functional airline as we speak. So as far as management is concerned, although it’s a difficult period, difficult period because of all of the uncertainty. But in reality, we’ve got very dedicated, very good pilots and excellent, excellent cabin crew. But we will have to expand and we will, we are expanding.

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