South African Airways (SA, Johannesburg O.R. Tambo) acting Chief Executive Officer Nico Bezuidenhout has told the Gulf News that his carrier would join Etihad Airways' airline group 'Etihad Airways Partners' so long as there is “no major conflict” with its existing partners.
“If it does not spoil the party on one of our other arrangements, we would cooperate,” Bezuidenhout said during the inaugural of SAA's new Johannesburg O.R. Tambo-Abu Dhabi International service last week. The flight is a code-share with Etihad.
Launched in October 2014, Etihad Airways Partners offers member airlines improved networks and schedules as well as enhanced frequent flyer benefits. It also offers access to economies of scale and operational synergies such as Centres of Excellence, shared sales teams in certain destinations, joint procurement of services and supplies, and shared pilot and cabin crew training at the Etihad Airways facilities in Abu Dhabi.
Though members are currently limited to Etihad and its affiliates Air Berlin (1991) (Berlin Tegel), Air Serbia (JU, Belgrade), Air Seychelles (HM, Mahé), Jet Airways (JAI, Mumbai International), and Darwin Airline (Lugano), membership is open to any airline even if it is part of an existing alliance.
For its part, the South African national carrier recently completed its 90-Day Action Plan which sought to cut ZAR1.25 billion (USD107.3 million) in expenditure from its current budget ahead of the full on implementation of its Long-Term Turnaround Strategy. The 90-Day Action Plan targetted six main areas including: immediately addressing the airline’s liquidity position; on-going solvency and medium-term funding requirements; investigating options for future funding of the business; focusing on governance defects and remedies; legal and high-level governance; reorganising and optimising assets; and improving communication.
Though media houses have looked to the Emirati carrier as a possible equity partner for South African Airways, SAA's track record of heavy annual losses and poor governance coupled with existing legislation that caps foreign ownership in local airlines at 25% will likely dissuade any immediate investment in the airline.
SAA is facing increasing pressure on all fronts with Etihad, Emirates (EK, Dubai International), Qatar Airways (QR, Doha Hamad International), and Turkish Airlines (TK, Istanbul Airport) squeezing its longhaul markets while budget start-ups FlySafair (FA, Johannesburg O.R. Tambo) and SkyWise (Johannesburg O.R. Tambo) have begun their onslaught on the domestic front.
