SAA turnaround strategy

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southside
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Re: SAA turnaround strategy

Unread post by southside » Tue Aug 13, 2019 11:14 am

I am pretty sure that a return ticket on SAA is significantly more than R1000.
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Re: SAA turnaround strategy

Unread post by HJK 414 » Tue Aug 13, 2019 11:17 am

southside wrote:
Tue Aug 13, 2019 11:14 am
I am pretty sure that a return ticket on SAA is significantly more than R1000.
SAA Group !!
Mango - return Durban - 859 Rand !!

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Re: SAA turnaround strategy

Unread post by GL » Tue Aug 13, 2019 11:18 am

HJK 414 wrote:
Tue Aug 13, 2019 10:11 am
GL wrote:
Tue Aug 13, 2019 10:05 am
I have a number of problems with Adriaan Kruger's Moneyweb story -
I feel that if Kruger had used the more recent numbers provided by SAA’s report on its 2018 numbers to parliament’s SCOPA and then Dec 18 numbers to SCOA (appropriations) the article would have been improved.
Also he is missing the fact that Vuyani Jarana cut a significant number of routes = revenue and costs, by putting 15% of pilots out on contract and cutting A340 usage. So I reckon Revenue and Costs are in fact down for 2018/19, and not up as he projects.
Of course I might be wrong – when the result are finally published!
The passenger load / SAA Group total per annum is about 10 Million passengers
If the losses start to approach 10 Billion Rand - the airline is subsidizing every passenger - on every flight with 1000 Rand !!
The taxpayers funding the affluent to fly …….

If the route network has shrunk and the passenger load as well - and we are down to let's say 8 Million Pax carried
The equation would stay the same (8 Billion loss / 8 Million pax) stays at 1000 Rand subsidy per pax on every flight.

JK
I have used subsidy / pax as a metric for some time now. But my thumb suck is currently a R4 billion group loss for 6 million pax (excl Mango)
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Re: SAA turnaround strategy

Unread post by Richard007 » Tue Aug 13, 2019 11:24 am

Yes, I believe the turnover is sharply down, now in the region of R26-27bn. Loss expected to be 30-32% of turnover.

I suspect we will see the usual progression of events here.
  • Numbers get leaked to the press an there is denial.
    Then we will get told that the reason the financials are just a few years late is because the auditors have 'going concern' questions and the 'shareholder' must write yet another check.
    The financials will confirm what the media has been sharing, maybe even a bit worse.
    The monumental loss will be blamed on old aeroplanes and previous management.
    We get told how invaluable SAA is and the green shoots of the turnaround are apparent.
    Parliament will call the next number in the queue and the press will be filled with stories about the next SOE bailout, probably Denel
    Next year, read again from number 1
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Re: SAA turnaround strategy

Unread post by Ned Yakman » Tue Aug 13, 2019 11:44 am

GL wrote:
Tue Aug 13, 2019 10:05 am
I have a number of problems with Adriaan Kruger's Moneyweb story -
I feel that if Kruger had used the more recent numbers provided by SAA’s report on its 2018 numbers to parliament’s SCOPA and then Dec 18 numbers to SCOA (appropriations) the article would have been improved.
Also he is missing the fact that Vuyani Jarana cut a significant number of routes = revenue and costs, by putting 15% of pilots out on contract and cutting A340 usage. So I reckon Revenue and Costs are in fact down for 2018/19, and not up as he projects.
Of course I might be wrong – when the result are finally published!
One can slice and dice the numbers to suit a narrative. According to his biog on Moneyweb, Kruger spent time serving as a local ward councillor, but it doesn't say for which party, ward/area or if he is still politically connected. At the very least he should put his cards on the table and declare any interests or agendas he might have. A lot of commentary on SAA tends to come from ideologically slanted outfits like the Free Market Foundation, which uses every opportunity to diss state ownership of any kind. But that's a red herring. Ownership isn't the problem, it's the management and their ability to administer the unpleasant but necessary medication.
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Re: SAA turnaround strategy

Unread post by HJK 414 » Tue Aug 13, 2019 12:17 pm

GL wrote:
Tue Aug 13, 2019 11:18 am

I have used subsidy / pax as a metric for some time now. But my thumb suck is currently a R4 billion group loss for 6 million pax (incl Mango, which is basically profitable - so SAA is worse.)

Guy, I do not get that one,

If we look at the 2017 financials - they reported 6.8 Million pax on SAA and 2.9 Million on Mango.
There is no way the total Pax number would have shrunk from 9.7 Million to 6 Million pax.
Their load factor would then be way too low...… that is not realistic

If we accept route deletion - and lower pax nrs - one could imagine 6 Million pax on SAA - with a projected loss of ?? (6 Billion ??)
If we then leave Mango for what it is (break even ?)…….. (I think the SAA loss will be much higher than the 6 Billion - hence V. Jarana quiting)
The effect would still be 1000 Rand or more per passenger per flight !

JK
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Re: SAA turnaround strategy

Unread post by GL » Tue Aug 13, 2019 12:54 pm

Yup JK - I agree - as I said, it was a thumb suck, and I made the mistake of mixing group and airline numbers. :oops:
(I have edited my original post).
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Re: SAA turnaround strategy

Unread post by HJK 414 » Tue Aug 13, 2019 1:21 pm

GL wrote:
Tue Aug 13, 2019 12:54 pm
Yup JK - I agree - as I said, it was a thumb suck, and I made the mistake of mixing group and airline numbers. :oops:
No worries,

I am just trying to follow ……... :wink:

The problem is that - in my opinion - they are beyond a realistic "salvation"
If we look at the "BIG" numbers only ... (2017 reference)

Turnover airline - just over 26 Billion Rand
Against the costs :
Interest payments - 1.6 Billion.
Aircraft Lease costs - 3.0 Billion
Employees and benefits - 4.0 Billion
Fuel / energy - 6.5 Billion

Even if the fuel cost price went down by 30% (not likely) they would save 2 Billion.
If they fired half of all the staff - they would save 2 Billion.
If the Government forgave them ALL the debt - they would save 1.5 Billion
and they STILL would not make a profit !!

Aircraft lease costs will go up (A350's) and maintenance will -at best, stay the same or increase - no saving there.
The other costs are mostly operations related - and savings would contribute - but would not be big numbers.

I think that the airline is now beyond help - and fully dependent on the State ....
And there is no Politician in the current crowd that has the backbone to willingly pull the trigger to end this saga.....

JK
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Re: SAA turnaround strategy

Unread post by evanb » Tue Aug 13, 2019 2:41 pm

HJK 414 wrote:
Tue Aug 13, 2019 12:17 pm
If we look at the 2017 financials - they reported 6.8 Million pax on SAA and 2.9 Million on Mango.
There is no way the total Pax number would have shrunk from 9.7 Million to 6 Million pax.
Their load factor would then be way too low...… that is not realistic
Most of the decline in flying was on the domestic network by shifting over flights from SA to JE, particularly PLZ and DUR. This actually comes with a net increase in capacity as JE's B738's are more dense than they were at SA, and utilization slightly lower. The regional and international decline was substantial but that effects ASKs more than it does absolute capacity. In sum, I expect passengers numbers to be down slightly, but not anywhere near the scale that some suggest.
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Re: SAA turnaround strategy

Unread post by Areaman » Wed Aug 14, 2019 1:24 pm

They have absolute zero regard for the honest
Hard working taxpayer! Waisting money that can be used for much more important requirements
In this country than a national airline.
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Re: SAA turnaround strategy

Unread post by IKTAV » Wed Aug 14, 2019 4:55 pm

Areaman wrote:
Wed Aug 14, 2019 1:24 pm
They have absolute zero regard for the honest
Hard working taxpayer! Waisting money that can be used for much more important requirements
In this country than a national airline.
So you’d rather give all those jobs to the ME airlines would you? You REALLY think the money saved would be used for more important things? By THIS government??? :lol: :lol: :lol:

What SAA actually needs is decent management. But good luck in getting THAT while the cANCer rules.
Same goes for ALL the SOEs.
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Re: SAA turnaround strategy

Unread post by jbayfan » Thu Aug 15, 2019 10:03 pm

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Re: SAA turnaround strategy

Unread post by RiNCEw1ND » Fri Aug 16, 2019 9:27 am

Areaman wrote:
Wed Aug 14, 2019 1:24 pm
They have absolute zero regard for the honest
Hard working taxpayer! Waisting money that can be used for much more important requirements
In this country than a national airline.
There are many many honest and hard working taxpayers at SAA too :wink:
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Re: SAA turnaround strategy

Unread post by Areaman » Sun Aug 18, 2019 7:28 pm

jbayfan wrote:
Thu Aug 15, 2019 10:03 pm
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Play the ball not the man. Warning issued
I actually did get a great education....may not be as learned as most people.... but i do get by with the little knowledge i possess...now will that be a Vectored ILS/RNAV GNSS/Viz!

Take it easy man....as Ace man always says....
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Re: SAA turnaround strategy

Unread post by ACE MAN » Sun Aug 18, 2019 7:48 pm

Areaman wrote:
Sun Aug 18, 2019 7:28 pm
jbayfan wrote:
Thu Aug 15, 2019 10:03 pm
Moderators Message:
Play the ball not the man. Warning issued
I actually did get a great education....may not be as learned as most people.... but i do get by with the little knowledge i possess...now will that be a Vectored ILS/RNAV GNSS/Viz!

Take it easy man....as Ace man always says....
Have a cool tool and a Tight ✈️✈️✈️, cheers
:lol: :lol: :lol:

Don't worry , the A350 will fix everything , now where have I heard that before :-k :-k
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