Sale of 9 A340s, spare engines fall under fleet renewal programme not business rescue process: SAA CEO
South African Airways which is edging towards a total collapse has put on sale five A340-300s and four A340-600s aircraft.
January 17, 2020: South African Airways (SAA) which is edging towards a total collapse will be selling five A340-300s and four A340-600s aircraft, 15 spare engines - including CFM International CFM56s and Rolls-Royce Trent 500s, and four auxiliary power units (APUs), as per the tender notice published on SAA’s website.
The sale of the aircraft is part of a process to shore up the balance sheet, but more importantly, to offload planes that were becoming old and expensive to run.
The aircraft on sale used to operate on regional and international routes, which will now be flown by the A330s and A350-900s. Zuks Ramasia, SAA’s Acting CEO said with the new A350s which will start operating on its international route network next week, replacing the A340s has become possible, hence the national carrier advertised the sale of the nine aircraft on January 10. SAA has leased four A350s in late 2019.
“The decision to sell the aircraft has nothing to do with the business rescue process. For some time we had planned to replace our four-engine aircraft with a new generation and more efficient aircraft as part of our fleet renewal programme. When we received five A330-300s in late 2017- early 2018, we had already planned to retire five A340s at that time, but due to the operational fleet undergoing maintenance, the retirement of the aircraft was postponed. Now is the time to sell the aircraft,” she said.
The SAA tender process for sale was held up due to various reasons but was fast-tracked once SAA went into business rescue.
The state-owned airline which entered a business-rescue process to allow a "radical restructuring" last month will receive 4 billion rand ($274 million) in funding. Half of the funds will come from existing lenders, guaranteed by the South African government, and the other half will be provided by the country’s treasury.
By the end of February 2020, the business rescue practitioners (BRPs) overseeing the South African Airways (SAA) have to present their turnaround plan for the bankrupt carrier.
The struggling airline has not made a profit since 2011. Several factors have been blamed for the airline’s failure including; government corruption, South Africa’s geographical position that cannot offer connecting flights, and stiff competition from European and Middle Eastern carriers.