SAA to pull plug on loss-making routes

[HAAN]

HAAN, what proportion of EK traffic from SA is to Europe, Asia, Australasia and other?

Dont have the numbers but the moste of EK traffic from SA connects to UK, Asia, Australia, and West Coast of USA.
Infact you will be amazed where SA passengers connect to. You will literaly have atleast 1 passenger connecting
onto one of Emirates 134 Destinations.

[A340ANDRE]

Although I try to understand the reasoning behind a Gulf hub for SAA's international long haul flights, I would like to point out below whether I will consider travelling via the gulf to my frequent visited destinations:

Hong Kong / Guangzhou
I can reach HKG in 13:30 with SAA where Emirates will take me almost 20 hours. My flight this week in C was only R3500 more expensive for the direct flight on SAA.

North China / Shanghai
I have used Emirates to both destinations, you can either leave at midnight from PEK/PVG to arrive in SA at 16:30 on the afternoon EK763 flight which equates to almost 22 hours of flying. The other option is to leave early morning and arrive on EK765 after 22:00 which for me is something I will never do again.

Europe/UK
At the moment I can leave the office at 16:00, for an evening flight on BA, VS, SA, LH, KL, AF and LX to arrive for a meeting in Europe by mid morning. Carriers are forced by passengers to let their aircraft stand at JNB and CPT from arrival in the morning to evening departure for this convenience. I consider a trip to Europe whether on leisure or business as extremely convenient as it is 10 to 11 hours without any time difference. The only viable option might be a connection point in Istanbul by TK.

South-America
There is no other options available from SA which means SAA has to be profitable on these routes. I do however almost never buy C seats on the routes to GRU or EZE as upgradable seats are relatively easy to get.

North-America
This is a market where I can see that Emirates or a gulf carrier can play a role, except maybe on the direct JFK service. I need to travel to the West Coast once/twice a year and transfer in JFK (Total 24 hrs), IAD (Total 26 hrs) or FRA (Total 25 hrs). Emirates can do the outbound leg in 26/27 hrs and inbound under 30 hrs which is not too bad.

Over the past two months I have travelled to PEK, FRA, MUC and HKG on SA and on all flights the C loads were 95%-100%. The Y loads did appear rather full as well. Although I do believe certain routes such as PEK (I have been on flights with 3 pax in C) and EZE can be cancelled and certain services consolidated we must not kill our competitive advantage with regards to our feed to domestic and regional flights as well as established route network because the leadership and management of our airline is questioned.

SAA's long haul services has good reason for existence, look at all other Intl carriers increasing capacity. We can buy aircraft and cut routes but that is not the core of the problem.

BTW, I had a superb crew to HKG last night and can honestly say that I had much more positive experiences with regards to on-board service recently.

[SimplyFly]

I don't work with airline economics, but I have an awkward question for the experts. I read somewhere that SAA has one of the highest ratios of employees to aircraft in the industry. Is this true? Is the answer then not to fix this ratio? I realise this is abit close to bone for some readers. I also realise that SA businesses often have higher headcounts, and some of that is understandable.

I fly SAA on international routes quite a bit, and I don't see many empty flights. If you can fill the flights, then I figure making money must be possible. Prices are determined by competition. Are the competing airlines also making a loss on each route? Are they fuller? Are they getting away with higher ticket prices? Do they have a better cost structure?

My concern is that if you keep cutting away loss-making routes, the few viable routes will carry an increased burden of overhead cost making them less viable. It's a spiral.

I have deliberately left myself wide open to be educated here.

Simpli

[SandPiper]

South-America
There is no other options available from SA which means SAA has to be profitable on these routes. I do however almost never buy C seats on the routes to GRU or EZE as upgradable seats are relatively easy to get.

The fact that SAA is the only operator on that route doesn't mean it is a profitable one either. No one else is doing it, why? It is a loss making route. Airline pricing and ticketing is a dark science. There are many daily flights to the UK, and guess what? They are also loss making.

[b7x7]

South-America
There is no other options available from SA which means SAA has to be profitable on these routes. I do however almost never buy C seats on the routes to GRU or EZE as upgradable seats are relatively easy to get.

The fact that SAA is the only operator on that route doesn't mean it is a profitable one either. No one else is doing it, why? It is a loss making route. Airline pricing and ticketing is a dark science. There are many daily flights to the UK, and guess what? They are also loss making.

The UK flights aren't loss making for all airlines. If you're referring to SAA then maybe. The key to profitable flights are the premium pax and the UK route certainly gets its fair share. The BA premium product is superior to SAA's so I can imagine that most business pax would prefer to fly on BA. As for VS' upper class vs SAA business class, I can't comment but people do rave about Virgin's upper class so it might be better than SAA too, in which case SAA is left as the last choice for premium pax. As for EZE and GRU, I'm not certain what the business traffic is like but if it is not much then it's very likely that SAA is not doing too well.

[RCM]

South-America
There is no other options available from SA which means SAA has to be profitable on these routes. I do however almost never buy C seats on the routes to GRU or EZE as upgradable seats are relatively easy to get.

The fact that SAA is the only operator on that route doesn't mean it is a profitable one either. No one else is doing it, why? It is a loss making route. Airline pricing and ticketing is a dark science. There are many daily flights to the UK, and guess what? They are also loss making.

The UK flights aren't loss making for all airlines. If you're referring to SAA then maybe. The key to profitable flights are the premium pax and the UK route certainly gets its fair share. The BA premium product is superior to SAA's so I can imagine that most business pax would prefer to fly on BA. As for VS' upper class vs SAA business class, I can't comment but people do rave about Virgin's upper class so it might be better than SAA too, in which case SAA is left as the last choice for premium pax. As for EZE and GRU, I'm not certain what the business traffic is like but if it is not much then it's very likely that SAA is not doing too well.

I don't agree that SAA is making a loss due to any of the Competition having a superior product , premium or economy. The flights are full or carry good load factors just about everywhere.

They are losing it by not controlling unnecessary costs...... And that is a can of worms.

[b7x7]

The fact that SAA is the only operator on that route doesn't mean it is a profitable one either. No one else is doing it, why? It is a loss making route. Airline pricing and ticketing is a dark science. There are many daily flights to the UK, and guess what? They are also loss making.

The UK flights aren't loss making for all airlines. If you're referring to SAA then maybe. The key to profitable flights are the premium pax and the UK route certainly gets its fair share. The BA premium product is superior to SAA's so I can imagine that most business pax would prefer to fly on BA. As for VS' upper class vs SAA business class, I can't comment but people do rave about Virgin's upper class so it might be better than SAA too, in which case SAA is left as the last choice for premium pax. As for EZE and GRU, I'm not certain what the business traffic is like but if it is not much then it's very likely that SAA is not doing too well.

I don't agree that SAA is making a loss due to any of the Competition having a superior product , premium or economy. The flights are full or carry good load factors just about everywhere.

They are losing it by not controlling unnecessary costs...... And that is a can of worms.

Ultimately you are correct. Because on the London route at least, the demand is there- for premium product on all carriers including SAA as evidenced by the full flights all year round.