South African Airways (SA, Johannesburg O.R. Tambo) last week backed out of a strategic partnership agreement with Emirates (EK, Dubai International) at the eleventh hour South Africa's Times newspaper has reported.
The deal, valued at USD165 million, was negotiated in secret over the past few months and would have seen SAA enter into an expanded code-share agreement with Emirates. Fellow UAE-based carrier, Etihad Airways (EY, Abu Dhabi International), had also tendered a proposal, the paper added.
A signing ceremony had been scheduled for the Four Seasons Hotel George V in central Paris with Emirates president Tim Clark to sign on behalf of his airline. However, SAA chairwoman Dudu Myeni reportedly did not pitch while CEO Nico Bezuidenhout was "instructed not to sign the agreement."
Neither party has yet to officially respond to the reports though there have been calls for Myeni to appear before a South African parliamentary portfolio committee to explain what exactly happened.
SAA's sole shareholder, the South African government, is attempting to transform SAA into a profitable, self-sustaining entity thus eliminating the airline's near total reliance on the national fiscus for funding.
The cash-strapped South African national carrier recently embarked on its Long-Term Turnaround Strategy (LTTS) having completed a 90-Day Action Plan at the end of March. The short-term plan saw ZAR1.25 billion (USD107.3 million) in savings being made to the airline's budget through the renegotiation of various supplier and aircraft-lease contracts. Various loss-making routes - to South America, China, and India - have also been dropped.
