South African Airways (SAA) has signed a $1 billion deal with French aircraft manufacturer Airbus to lease six new A330-200 aircraft from next year, introducing a new type into its fleet. The move follows last year’ s Airbus-assisted profit turnaround at the state airline and a resolution of a dispute between the two parties.
French Trade Minister Anne-Marie Idrac made the announcement in Cape Town yesterday, after a meeting with Minister of Public Enterprises Barbara Hogan. Idrac is in the country to promote economic ties between France and SA and according Finance 24, said the deal illustrated a “long-term and lavish” partnership between the two companies.
SAA last year bucked global airline industry trends to post a remarkable R398-million net profit for the year to March, a massive swing from a R1.085 billion loss the year before. CFO Kaushik Patel noted last September that posting a profit was “gratifying” following seven years of losses for the airline.
Noteworthy was SAA`s operating profit of R1.9 billion against a small operating loss of R72 million the previous financial year. This was, however, offset by a fuel hedging loss of R1.04 billion and restructuring costs of R474 million, leaving a loss of R10 million. Taking it from –R10 million to +R398 million was a R408 million reversal of a R727 million provision last year regarding the botched cancellation of an unwanted order for 15 Airbus A320 aircraft.
Then-acting CE Chris Smyth said the airline that thought it had cancelled the orders in 2002. A R727 million provision had to be made in 2008 after Airbus demanded that SAA make pre-delivery payments on the aircraft and SAA found it was contractually bound to do so following the bungled cancellation. Deliveries are scheduled to commence this year. Smyth also announced SAA had signed a memorandum of understanding with Airbus to lease six A330- 200s to replace its ageing fleet of A340-200s. SAA does not currently operate the A330.
Airbus vice president of sales, Hadi Akoum, said the long-haul aircraft, which will be taken up by SAA from January, will replace SAA’s existing and ageing A340-200s. “These will have all the latest, all the bells and whistles,” said Akoum.
The Engineering News Online adds this morning that SAA acting head of group corporate affairs Vimla Maistry said that the deal would boost the company’s recent gains it had achieved through a successful restructuring programme.
The twin engine A330 was one of the most extensively used longhaul aircraft in service today and would replace SAA’s six A340-200s.
“The new aircraft will be built and configured to SAA’s specification, featuring a refreshed cabin interior and an enhanced in-flight entertainment system ensuring that we continue to have a young, world-class fleet,” said Maistry.
The new modern fleet would consume significantly less fuel, which means that SAA would emit reduced levels of carbon and nitrous oxide, the most significant contribution to airline emissions, the online publication added.
Pic: A four-engined Airbus A340 in the foreground with a twin-engined A330 in the background.