SOUTH AFRICA: South African Airways To Be Rescued With £200 Million To Avoid Imminent Collapse

South African Airways is to be placed into a business recuse following a sharp deterioration in its financial position.

The flag-carrier has battled mounting losses for a number of years, and will now seek an equity partner as the South African government looks to limit its liability.

The carrier last made a profit in 2011.

Officials said they planned to bring in a business rescue practitioner to take charge of the carrier and operate the airline with the assistance of management.

The government will also inject R4 billion (£200 million) into the carrier to avoid imminent collapse.

The state-owned carrier said strike action last month had severely impacted its financial position.

Full service resumed on December 1st, with the airline agreeing to a six per cent pay rise for cabin crew.

South African Airways said South African Airways is today in a position to announce that the board of directors of SAA has adopted a resolution to place the company into business rescue at the earliest opportunity.

As previously announced, the South African Airways board of directors and the executive committee have been in consultations with the shareholder, the department of public enterprises, in an effort to find a solution to our company’s well-documented financial challenges.

South African Airways understands that this decision presents many challenges and uncertainties for its staff.

The company will engage in targeted communication and support for all employee groups at this difficult time.

South African Airways will endeavour to operate a new provisional timetable and will publish details shortly.

The company greatly appreciates the continued support of both its customers and partners in the travel industry around the world.

It is important to point out that services operated by South African Airways’ subsidiary airline, Mango, will continue as usual and as scheduled.

The airline is the first South African state group to enter business rescue since the ruling African National Congress took power in 1994.

However, it is increasingly seen as expendable, with the government keen to divert resources to other areas of the economy.

Best, Worst Airlines And Airports In The World

Qatar Airways has been ranked the best airline in the world, according to a new study.

The research, carried out by consumer group AirHelp, has put the Middle Eastern airline on top with Hamad International airport, also based in Doha, the capital of Qatar.

The group ranked 72 airlines and 141 airports analysing a series of key performance indicators (KPI) including on-time performance and service quality. Twitter sentiment was also used to measure the KPI of the airports.

Closely followed by Qatar Airways is Lufthansa in second and Etihad Airways in third and Singapore Airlines and South African Airways in fourth and fifth respectively.

Among the worst airlines were Air Mauritius, EasyJet, Pakistan International Airlines, Royal Jordanian Airlines and Wow Air.

In terms of airports, Greece's Athens International came in second place, followed by Tokyo Haneda, Germany's Cologne Bonn and Changi, Singapore.

The worst were Stockholm Bromma, Sweden; Paris Orly; Lyon; London Stansted and Kuwait International.

London Heathrow did not make it into the top 10, coming in at number 81 out of the 141-strong list.

The report found that Stansted's poor standing was due to a large volume of negative tweets. Gatwick was the worst airport when considering this metric alone, it said.

AirHelp CEO and co-founder Henrik Zillmer said: For some time now UK airports have seemingly been in the news for all the wrong reasons and that has been realised in this data.

The UK is enviably positioned when it comes to physical movement of people globally, but this report needs to serve as a wake-up call when it comes to actual performance.

Passengers are clearly not happy and while it will be a challenge to address the issues highlighted in this report, it is also an opportunity to halt the decline in performance and provide consumers with a better experience.

Best And Worst Airlines

Best And Worst Airports

Tourism Observer

KENYA: Kenya Airways To Fly 10 Times A Week On Non-stop Flights To Cape Town And Commence Daily Flights To New York In October

Kenya Airways (KQ) will fly to Cape Town 10 times weekly following the introduction of direct flights to the South African city on Wednesday.

The three non-stop flights will depart Nairobi every Wednesday, Friday and Sunday as the carrier stretches its wings to capture the African market.

We are indeed very proud to increase our frequencies to South Africa to cater for the growing number of our customers who travel between Nairobi and Cape Town.

In addition to enhancing Africa integration, this new route will be beneficial to the tourism industry as it establishes vital links with our global network, said Kenya Airways Chief Commercial Officer Vincent Coste.

The national carrier began flying the Cape Town route via Livingstone in 2016, with seven weekly flights to the South African capital. This in addition to the three non-stop flights brings the tally to 10.

The carrier is set to have its maiden flights to New York as well as introduction of direct flights to Mauritius.

The carrier already has a pre-existing code sharing agreement with Air Mauritius, which flies between Port Louis and Nairobi.

This will mean that passengers from Kenya will from June have the option of flying daily to Mauritius.

KQ flies to 42 African destinations out of a total 51 globally.

Kenya Airways is set to commence daily flights between Nairobi and New York in October, marking a milestone for the national carrier that will cut the flight time between the two cities by more than seven hours.

Travellers have begun booking advance tickets for the airline’s maiden flight to the John F. Kennedy International Airport (JFK).

Kenya Airways has already secured a landing slot at JFK.

The trans-Atlantic flights, scheduled to depart Jomo Kenyatta International Airport (JKIA) at 10:30pm every day, will last 15 hours.

This is a reduction from the current flight time of over 22 hours, including lengthy layovers.

We are currently loading the flights onto our system. We shall go live and ready for bookings on Thursday, says Kenya Airways chairman Michael Joseph in a telephone interview.

The launch of direct flights between Kenya and the United States will mark a significant milestone for the business and for the country.

Passengers travelling to JFK will arrive at 6.30 a.m., in time for morning meetings, while the return flight from JKF will depart at 1.30 p.m. and arrive in Nairobi at 10.30 a.m. the next day.

Each trip will have a maximum of 234 passengers, 204 in Economy and the rest in Business Class of the national carrier’s Dreamliner aircraft.

Kenya Airways, known in short as KQ, had announced its preference to operate the flights through a code-share partnership with US carrier Delta Airlines, its SkyTeam partner.

Delta, Virgin Atlantic and KLM Air France are KQ joint venture partner and shareholder are, however, currently working out a time-consuming merger, which has seen KQ opt to go it alone for now.

When this merger is over, we may add another flight to the US with a connecting flight through West Africa, said Mr Joseph.

The government, KQ’s top shareholder, has recently stepped up its campaign to actualise direct flights to America, with the Uhuru Kenyatta administration anticipating it will boost exports to the US and help jumpstart the tourism sector.

With about 100,000 tourists visiting Kenya every year for leisure and business, the US remains the top source of visitors into Kenya from the Americas, according to Kenya Tourism Board (KTB) data

Imports from the US stood at Sh47.8 billion in 2016, mostly consisting of machinery and equipment while exports, mostly garments and apparels, stood at Sh43.4 billion.

Kenya has recently implemented a raft of recommendations by the US government to enhance security, among them separation of passenger arrival and departure terminals, clearing the flight path and fencing off the airport.

As a result, the US Federal Aviation Administration (FAA) last February gave Kenya the Category One rating, paving the way for direct flights subject to other permits being received by the airport and KQ.

Mr Joseph now says the airline has secured all but two permits required for it to fly to the US, a position the Kenya Civil Aviation Authority (KCAA) director-general, Gilbert Kibe, confirmed.

JFK is yet to be cleared as the last point of departure, a security-based permit to be issued by the US Transportation Security Administration, said Mr Kibe.

The other outstanding permit is the technical authority to operate from the FAA. I am confident that KQ will receive the two in time.

Mr Joseph, who also exuded optimism about securing the twin clearances, said it was standard airline practice to put ticket up for sale at the closing preparatory stages of entering a new market.

JKIA’s longstanding second-class status forced passengers flying from Kenya to the US to transit through Europe, the Middle East or the four African countries, South Africa, Ethiopia, Cape Verde, and Nigeria whose airports have the designation.

Airlines plying the JKIA and JFK route include Turkish Airlines (through Istanbul), Qatar Airways (through Doha) and British Airways (through Heathrow), KLM (through Amsterdam) and Emirates (through Dubai and/or Italy).

Ethiopian Airlines and South African Airways also have flights to the US while RwandAir hopes to commence such flights later this year.

KQ’s foray into the US comes at a time when the airline is facing an uphill task to turnaround its fortunes, with a recent restructuring of its balance sheet seen as the last chance.

The airline’s management, which recently announced a Sh3.8 billion half-year net loss for the business, hopes that the new route will help boost the their flat revenues.

Imports from the US stood at Sh47.8 billion in 2016, mostly consisting of machinery and equipment while exports, mostly garments and apparels, stood at Sh43.4 billion.

Kenya has recently implemented a raft of recommendations by the US government to enhance security, among them separation of passenger arrival and departure terminals, clearing the flight path and fencing off the airport.

As a result, the US Federal Aviation Administration (FAA) last February gave Kenya the Category One rating, paving the way for direct flights subject to other permits being received by the airport and KQ.

Mr Joseph now says the airline has secured all but two permits required for it to fly to the US, a position the Kenya Civil Aviation Authority (KCAA) director-general, Gilbert Kibe, confirmed.

JFK is yet to be cleared as the last point of departure, a security-based permit to be issued by the US Transportation Security Administration, said Mr Kibe.

“The other outstanding permit is the technical authority to operate from the FAA. I am confident that KQ will receive the two in time.”

Optimistic

Mr Joseph, who also exuded optimism about securing the twin clearances, said it was standard airline practice to put ticket up for sale at the closing preparatory stages of entering a new market.

JKIA’s longstanding second-class status forced passengers flying from Kenya to the US to transit through Europe, the Middle East or the four African countries — South Africa, Ethiopia, Cape Verde, and Nigeria — whose airports have the designation.

Airlines plying the JKIA and JFK route include Turkish Airlines (through Istanbul), Qatar Airways (through Doha) and British Airways (through Heathrow), KLM (through Amsterdam) and Emirates (through Dubai and/or Italy).

Ethiopian Airlines and South African Airways also have flights to the US while RwandAir hopes to commence such flights later this year.

KQ’s foray into the US comes at a time when the airline is facing an uphill task to turnaround its fortunes, with a recent restructuring of its balance sheet seen as the last chance.

The airline’s management, which recently announced a Sh3.8 billion half-year net loss for the business, hopes that the new route will help boost the their flat revenues.

Kenya Airways' destinations outside Africa are:

- Guangzhou, China

- Paris, France

- Hong Kong, China

- Mumbai, India

- Amsterdam, Netherlands

- Jeddah, Saudi Arabia

- Bangkok, Thailand

- London, United Kingdom

- Hanoi, Vietnam

- Dubai, UAE

Kenya Airways (KQ) has been feted as Africa’s leading airline at the 24th Annual World Travel Awards held in Kigali, Rwanda.

This is the second consecutive year the national carrier has won the coveted title, beating other nominees including South African Airways, RwandAir, EgyptAir and Royal Air Maroc.

KQ was also named the winner in the Business Class category for the fifth consecutive year, while Ethiopian Airlines bagged the award in the Economy Class category - winning it for the fifth year in a row.

Winning these awards would not have been possible without the passion and dedication of the Kenya Airways team and the strong support from our guests.

Our guests are at the heart of everything we do at the airline and these two awards confirm our undeterred commitment to them, said KQ boss Sebastian Mikosz in a statement Wednesday.

Ethiopian Airlines was feted as Africa's leading airline brand, coming out tops in the category against Kenya Airways, South African Airways, RwandAir, EgyptAir, Tunisair and Royal Air Maroc.

Cape Town International Airport in South Africa was named the region's leading hub while Diani Beach in Kenya was named as Africa's leading beach destination.

The World Travel Awards serve to recognise, reward and celebrate excellence across all sectors of the global travel and tourism industry within each key geographical region.

Last year's ceremony was held in Zanzibar, Tanzania.


Tourism Observer

SOUTH AFRICA: South African Airways Expecting $400 Million Capital Injection From Government

South African government has promised another $400 million capital injection into failing airline South African Airways.

This comes after CEO Vuyani Jarana told the government in April that they needed a capital injection urgently.

Jarana said that the government has committed to inject another 5 billion rands into SAA. Part of that 5 billion rands we will repay some of the creditors, suppliers, then the balance will support us for working capital until around October/November.

The Treasury of the South African Government confirmed in a statement that the outcome of this process is expected to be finalized in time for the 2018 MTBPS (Medium Term Budget Policy Statement).

This statement will be presented to parliament in October.

The Government also added that South African Airways needs a private equity partner to fund the airline further as the parliament shouldn’t need to be bailing them out all of the time.

The airline did concede that job losses will have to be implemented in their current workforce of 10,000 people, saying it was inevitable.

Jarana said that The first priority for me is job preservation, how do you find alternative jobs for people as a starting point before you go into the hard issues of retrenchments?

South African Airlines is to receive a $400 million capital injection from the Government of South Africa.

This is all subject to Treasury approval by October 2018.

Jarana’s ambitions for the airline is to break even within three years as well as being able to pay for their operations without needing handouts from the government.

SAA has not produced a profit for seven years and has received up to 20 billion Rand in state support already.

SAA claims that the $400 million is needed to prop up the business, pay off debts as well as implementing a turnaround plan.

It remains to be seen what the turnaround plan consists of and whether it will produce the results the airline needs and what the government wants so then payback of the bailout and can begin in due course.

Whether cutbacks are going to be needed seems very likely, but it is a promising sign for the employees that Jarana’s priorities in the cutbacks are job preservation and not just the straight-out redundancies that are on everyone’s minds.

Tourism Observer

KENYA: Ethiopian Airlines To Fly Twice Daily To Mombasa, Plans To Order 13 Additional Boeing 787 Jets And 6 More Airbus A350s

Ethiopian Airlines has been allowed more flights on the Mombasa route in an agreement between President Uhuru Kenyatta and Ethiopian Prime Minister Abiy Ahmed Ali.

The airline will now fly to Mombasa twice a day as Ethiopia and Kenya seek to deepen their trade ties.

The Kenyan side agreed to grant Ethiopian Airlines a second frequency flight to Mombasa, said a joint communique from State House after Mr Kenyatta met Dr Ali in Nairobi.

The extra flight given to Ethiopian Airlines will be a boost to coastal tourism which has been heavily dependent on charter flights from Europe.

Only two regional airlines, Ethiopian Airlines and RwandAir operate scheduled flights to Mombasa from Addis Ababa and Kigali respectively.

Turkish Airlines is the only one from Europe operating scheduled flights between Istanbul and Mombasa.

Government owned Ethiopian Airlines is ahead of other African airlines like Kenya Airways and South African Airways to become Africa’s largest airline by revenue and profit.

Its plan was to more than double its fleet to 120 and become Africa’s biggest airline by 2025,

Ethiopian Airlines has more than 100 aircrafts flying to various destinations in Africa, Asia to South America, and four US cities.

Kenya Airways plans its first direct flight to the US in October.

Hoteliers at the Coast have been lobbying for more international direct flights to Mombasa to ease air transport through Moi International Airport and attract more tourists.

As of now tourists visiting Kenya using other airlines must first land at Nairobi’s Jomo Kenyatta International Airport before connecting to Mombasa.

Ethiopian Airlines’ recent growth has been supersonic that it revised the ambitious 15-year strategy set in 2010 and plans to buy more planes to step up its expansion.

Its plan had been to more than double its fleet to 120 and become Africa’s biggest airline by 2025, but it already has 100 planes flying to dozens of destinations from Africa, Europe, Asia to South America, including four US cities.

The State-owned carrier has also outpaced regional competitors Kenya Airways and South African Airways to become Africa’s largest airline by revenue and profit, according to the International Air Transport Association.

We have expanded more than we planned, said Chief Executive Tewolde Gebremariam. We had to revise the objective to make it 150 airplanes or more by 2025.

It now plans to place orders this year for 13 additional Boeing 787 jets and six more Airbus A350s, he said.

The airline has come a long way from when it was established in 1945 as a joint venture with now-defunct U.S. carrier Trans World Airlines (TWA).

In its 2016/17 financial year Ethiopian Airlines generated $2.7 billion in revenue, Tewolde said, up more than 11 percent from the previous year.

Passenger numbers climbed by more than 18 percent to 9 million while net profit was $233 million, up from a little more than $220 million.

In 2013 Ethiopian Airlines acquired a minority stake in Malawi Airlines to serve as a base for its southern Africa operations.

That kicked off a series of deals including January’s agreement with Zambia’s government to relaunch that country’s national carrier, shut down more than two decades ago.

The strategy is aimed at gaining a competitive advantage against rivals such as those in the Gulf, Tewolde said.

With Africa’s aviation industry still hampered by government protectionism and high taxes, Tewolde said that setting up or taking stakes in small carriers is a way around the restrictions.

Ethiopian Airlines aims to create a new airline in Mozambique that it will fully own, he said, adding that it is also in talks with Chad, Djibouti, Equatorial Guinea and Guinea to set up carriers through joint ventures.

Going forward, it will be difficult for us to compete with only one hub in Addis Ababa.

Although it isn’t all clear skies for the fast-growing carrier.

The economic downturn in Africa caused by the collapse of oil prices in 2014 has indirectly hit the continent’s airlines, and Ethiopian is unable to repatriate more than $145 million in profits from Angola, Sudan and Zimbabwe because of foreign exchange shortages, Tewolde said.

Running a business needs cash flow, he said. Here in Africa, we have a huge problem with this, Tewolde Gebremariam says.


Tourism Observer

SOUTH AFRICA: South African Airways Needs $399 Million Cash Injection To Stay In The Sky

South Africa’s state carrier SAA requires a $399 million cash injection in the current financial year to help it meet its financial obligations, a senior treasury official said on Tuesday.

National Treasury director-general Dondo Mogajane told parliament the cash injection could however not come from government, which has so far pumped 20 billion rand into the firm.

Mogajane said treasury was willing to consider selling a stake in the airliner to a private equity partner.

Investigations into the audit of South African Airways is to be finalised soon.

The Independent Regulatory Board for Auditors (IRBA) has told Parliament’s standing committee that the probe is far advanced.

It follows a complaint by Democratic Alliance MP Alf Lees against auditors PriceWaterhouseCoopers and Nkonki Inc.

He’s questioned the national carrier’s going-concern status, when it’s struggling to stay in the sky.

Treasury says the national carrier needs another R5 billion in this financial year to keep flying. This is on top of last year's R10 billion bailout.

IRBA chief executive Bernard Agulhas says that the regulator completed its probe of SAA's 2015/2016 financial statements but decided to conduct further checks.

We are concerned that there might be broader issues that we need to cover as more information comes to our attention.

We cannot continue to change the terms of reference of our investigation, but we cannot ignore anything that comes to our attention.

Agulhas says he expects the probe to be finalised at the next meeting of the board's investigations committee.

South African Airways requires a R5 billion cash injection in the current financial year to help it meet its financial obligations.

This is according to National Treasury director-general Dondo Mogajane, who has told parliament the cash injection could not come from government as it has already pumped R20 billion rand into the state-owned enterprise, reports Reuters.

Instead, other avenues are being considered to help cover the shortfall, with Mogajane saying that the National Treasury was willing to consider selling a stake in the airliner to a private equity partner.

The consideration follows confirmation by deputy minister of finance, Mondli Gungubele, that the airline will require an additional R12 billion in bailouts over the next three years.

Speaking to parliament in April, Gungubele said that SAA would need another government bailout in the 2018/19 financial year of R5 billion – with another R5 billion needed in 2019/2020, and another R2 billion needed in 2020/21.

This would allow the airline to continue operations, and also to help service its debt which matures in March 2019.

CEO Vuyani Jarana is at the early stage of a turnaround plan designed to return the carrier to break-even by 2020 and ease dependency on the government, which last year approved a bailout to swerve a default on debt owed to Citigroup Inc.

The airline has shaken up the board and cut routes to reduce costs but is yet to emerge from any financial distress.


Tourism Observer

UGANDA: South African Airways Cutts Flights To Entebbe From 7 to 6 Per Week, As Monach Airlines Collapses

South African Airways (SAA) has cut its flights to Uganda from 7 to 6 flights a week, starting October 29.

There had been speculation that the airline plans to cancel flights to Entebbe.

SAA country manager for Uganda Yogi Birigwa said We are only reducing one frequency, she said.

Contrary to speculation in the media, the Ugandan market remains important to us and SAA will maintain its presence there.

We will adjust capacity to Entebbe from 7 to 6 flights per week, explained Mr Tlali Tlali, the spokesperson, in a statement issued by the airline.

Flight will be on Mondays, Wednesdays, Friday, Saturday and Sunday-two flights.

Currently the airline operates on Mondays, Tuesdays, Wednesdays, Fridays Saturday and Sunday- two flights.

South African Airways (SAA) owes nearly R7bn in debt and was recently ordered to pay back R1.9bn to Citibank by September 30‚ just two months after receiving a state bailout of R2.3bn to pay back money owed to the Standard Chartered bank.

Flights to Luanda (Angola) will be reduced from 7 to 4 per week and the aircraft type down gauged and Kinshasa (DRC) from 6 to 5 per week.

Flights to Brazzaville, Pointe Noir and Libreville with connections onward to Cotonou and Douala are under review.

The airline is evaluating options to reduce operations or down gauge aircraft type.

Monach Airlines has collapsed as of now leaving more than 100,000 passengers stranded.

UNITED KINGDOM: Monarch Airlines Has Collapsed, With More Than 100,000 Passengers Stranded



Tourism Observer

SOUTH AFRICA: South Africa Airways And South African Express In Financial Crisis

In its latest audited statements, the airline says it urgently needs more capital to pay its debts, and to re-fleet.

It's not only the national airline that needs more money to stay in the sky. It's smaller, regional counterpart South African (SA) Express says it also needs urgent capital to continue operating.

The audited financial statements of the regional airline for 2015/16 have been tabled in Parliament.

Last week it was revealed in the National Assembly that Cabinet is considering a R10 billion bail out to keep South African Airways (SAA) from defaulting on its loans.

Following hefty losses in 2014, SA Express surprisingly registered a post-tax profit of R16.9 million for the 2015/16 financial year.

But this was largely due to it being able to extend the repayment of a R121 million loan to 2023.

In its latest audited statements, the airline says it urgently needs more capital to pay its debts, and to re-fleet.

In June, the airline's executives told MPs that it was again expected to fall into the red when its 2016-2017 figures are audited.

The Democratic Alliances' (DA) Natasha Mazzone said: "We need to make sure they can pay their debt firstly and secondly that we can get this airline on some kind of trajectory that sees them running at a clean profit going forward."

MPs will be grappling with the figures at a meeting of the Public Accounts Committee later this week.

Finance Minister Malusi Gigaba says the government has not yet adopted any of the SAA recapitalisation proposals.

Finance Minister Malusi Gigaba says selling South African Airways (SAA)’s non-core assets are among the proposals being considered to raise funds to recapitalise the ailing airline.

Gigaba made the comments on Friday following a meeting with the CEO Initiative.

It emerged this week that government was considering selling its shares in Telkom to raise the capital to bail out the national carrier.

Gigaba says the government has not yet adopted any of the SAA recapitalisation proposals.

I would like to, therefore, caution against hysteria created by our considering of various options. Cabinet has appointed four ministers to look at various options to capitalise South African Airways.

He says apart from selling Telkom shares, there are other ideas on the table.

Such as the disposal of non-core assets, share equity, Private Public Partnerships and variety of other options that we’re going to be looking at.

Gigaba says the issue is being dealt with urgently.

SA Express says that like SAA, it will need a cash injection to keep their planes in the sky.

Government’s ailing regional airline SA Express will have to explain to Parliament this week why it’s incurred more than R30 million in fruitless and wasteful expenditure.

The airline’s latest audited financial statements reveal that while it made a R16 million profit in 2015/16, it also incurred an irregular expenditure of the same amount.

Chairperson of Parliament’s Standing Committee on Public Accounts (Scopa) Themba Godi says Members of Parliament (MPs) will be considering the financial position of the airline against the backdrop of talks of a merger with South African Airways (SAA).

SA Express says its short to long term debt is hampering its profitability and its weak balance sheet means it also can’t raise any more cash.

Scopa chairperson Themba Godi said: Their audit is not proving to be an improvement but a worsening situation.

But it’s the airline’s irregular, fruitless and wasteful expenditure that Scopa really wants to probe.

The airline says it won’t be able to recover the more than R30 million in fruitless and wasteful expenditure because it was incurred on interest and penalties as a result of its poor cash flow.

If you have an entity that’s basically ailing you can’t then have fruitless and wasteful expenditure of whatever quantity.

The airline says that like SAA, it will need a cash injection to keep their planes in the sky.

The Democratic Alliance (DA) in Parliament revealed that government may give South African Airways (SAA) another bailout to the tune of R10 billion.

Stephen Grootes spoke to Scopa chair Themba Godi who says the proceedings regarding the plan that is being considered to bail out SAA is only the beginning in tackling the problems facing the airline.



Tourism Observer

SOUTH AFRICA: Air Zimbabwe And South African Airways (SAA) Commence Flights After Misunderstandings

The deadlock between South African Airways (SAA) and Air Zimbabwe has been resolved and all flights schedules are back to normal.

Thousands of travellers flying between Zimbabwe and South Africa were left stranded as civil aviation authorities from both countries grounded flights following a dispute over permits.

But SAA spokesperson Tlali Tlali confirmed both airlines had been able to supply outstanding documents and flights resumed.

It doesn’t matter how many times the issue is being raised,Making reference to history, harping on the same point.

The reality is that we are providing air service transportation to people who are in need of it between the two countries. I think we should be forward-looking, Mr Tlali said.

On Saturday, SAA cancelled all its flights after one of its planes was grounded in Harare because it did not have a valid foreign operating permit.

An Air Zimbabwe flight was also prevented from leaving the OR Tambo International Airport in Johannesburg, as it carried an expired foreign operators' permit.

The move to ground planes, thought to be political interference, coincidentally happened as the South African government was mulling on whether to grant Zimbabwe’s First Lady Grace Mugabe, diplomatic immunity.


Mrs Mugabe allegedly attacked a 21-year-old model at a Sandton Hotel in Johannesburg.

The matter was reported to the police, but International Relations and Corporation minister Maite Nkoana-Mashabane on Sunday confirmed that Mrs Mugabe had been granted diplomatic immunity.

The minister said she had agonised over the matter and that it had not been an easy decision to make‚ but that diplomatic immunity was warranted after careful consideration of all the relevant factors.



Tourism Observer

SOUTH AFRICA: Public Investment Corporation May Fund South African Airways

National Treasury is considering a number of avenues to finance the loss-making SAA, which may include the Public Investment Corporation (PIC) as a public equity partner.

During a Parliamentary briefing on SAA’s financial performance, the Democratic Alliance’s Alf Lees and David Maynier pressed Acting Treasury Director General Dondo Mogajane to say whether SAA will be partly financed with funds from the Government Employee Pension Fund.

I want to know if SAA’s equity partner could be a public one, Lees said.

National Treasury made it clear there will be a recapitalisation of SAA. And we’re left with the distinct impression that the GEPF could be the public equity partner who would invest pensioner’s money into the loss-making airline. Has this been proposed?

The DA’s questions followed after Finance Minister Malusi Gigaba recently acknowledged in a Parliamentary question-and-answer session that SAA’s consideration of a minority equity partner may not necessarily be a private one, but that it could also be a public entity.

Mogajane told members of Parliament on Wednesday that National Treasury is taking a long-term view with regard to the recapitalisation of the airline, which may also include a cash injection.

He did not reject the possibility of the PIC as an equity partner outright, but said there are “options available.

It could make sense to get other lenders to take over the current debt, including engagements to repatriate funds in foreign currency. It may not even be necessary to recapitalise the airline to such an extent, Mogajane said.

Deputy Finance Minister Sfiso Buthelezi earlier in the briefing said SAA’s cash flow was affected by R1.05bn that cannot be repatriated from Angola, Zimbabwe, Nigeria and Senegal.

National Treasury will call on the highest office – even President Jacob Zuma if need be – to get these funds back, he said.

SAA is currently using Seabury consulting group to re-evaluate SAA’s long-term turnaround strategy, including its recapitalisation needs.

During a second round of questions, the DA’s Maynier said it would be outrageous for a public investment company, such as the PIC, to invest in SAA.

This is pensioners’ money that will be invested in an enterprise which has no chance of returning to profitability.

Derek Hanekom, former tourism minister who was recently appointed as an ANC member of the standing committee on finance, commented that it was unfair to say that SAA would never return to profitability.

He added that a national carrier has a strategic function beyond making profits. The main intention should not be to make profits, as it would then limit the purpose of having a national carrier.

There is a reason for having a national carrier – to put it to strategic use even if there are loss-making routes. A loss-making route may have a purpose because of tourism. We should look at it in a more nuanced way,Hanekom said.

The national carrier’s financial performance for the year to end March 2017 reflects a R4.8bn loss.

Recently appointed CFO Phumeza Nhantsi told MPs that the cumulative amount of guarantees given to the airline thus far is R19.1bn.

The airline’s cost-cutting efforts however, have saved R700m in the 2016/17 financial year, although the results haven’t been audited yet.

SAA’s cash burn rate, is still high though at R250m per month. To this end, a cash conservation office has been set up to monitor spending, Nhantsi said.

HAWAII: Hawaiian Airlines And South African Airways Partner In New Interline Agreement

South African Airways and Hawaiian Airlines established a new interline agreement providing new and convenient flight options for both SAA and Hawaiian customers traveling between the Hawai’ian Islands and South Africa.

The partnership offers increased convenience to customers by allowing travel on one single ticket and through interline baggage transfer upon check-in with either SAA or Hawaiian Airlines in the United States or Southern Africa.

This new interline partnership enable SAA and Hawaiian Airlines to broaden their route networks to provide some of the fastest connections between Hawai’i and destinations throughout Africa, said Todd Neuman, executive vice president, Americas, South African Airways.

Our mutual customers will enjoy the warm traditional South African and Hawai’ian Island hospitality throughout their journey from two award-winning airlines.

With immediate effect, customers can purchase a single itinerary for travel on flights of both carriers allowing passengers to enjoy connections via New York’s John F. Kennedy International Airport between Hawaiian Airlines’ neighbor island network in Hawai’i and in more than 75 destinations served by SAA.

JFK is a primary gateway for SAA in North America, with daily non-stop service to South Africa, allowing the new partnership to provide convenient connections.

Hawaiian Airlines flights from Honolulu, Hawai’i (HNL) to Johannesburg, South Africa (JNB) depart Hawai’i at 3:10 p.m., and arrive at JFK 6:55 a.m. the next morning. SAA serviced flights depart JFK 11:15 a.m., and arrive in JNB at 8:05 a.m., the next morning.

Flights from JNB to HNL depart JNB at 9 p.m. and arrive in JFK at 6:40 a.m., while flights serviced by Hawaiian Airlines depart JFK at 10 a.m., and arrive in Honolulu at 3:05 p.m.

SOUTH AFRICA: Do New Zealanders Need A Visa To Travel To South Africa?

According to Tim Clyde-Smith, SAA’s Country Manager for Australasia, new visa rules came into force on January 16 of this year

South African Airways has issued a warning to remind travelers about the need for New Zealand passport holders living in Australia to obtain a visa before visiting South Africa.

“While the majority of New Zealand passport holders do get the necessary documentation and obtain their visas, we are seeing quite a few incidents when people are unaware of the requirements,” Tim said.

“The new rules apply to all diplomatic, official and ordinary passport holders of New Zealand. If they do not have a visa, an airline cannot check them in for their flight to South Africa, meaning added expense and inconvenience, not only to the traveler but also to the travel consultant and their agency,” he said.

Further information on visa requirements for New Zealand passport holders and required documentation for any persons under the age of 18 years travelling to South Africa can be found at dha.gov.za to find out about supporting documents.

For travel agents, details on both document requirements are in Timatic located in GDS.

Alternatively, the South African High Commission in Canberra can be contacted on 02 6272 7300.

“SAA is urging our travel partners in particular to ensure their customers know the new rules. Even if the tickets were issued before its introduction on 16 January, please be professional about your relationship with the customer and inform them of the new requirements to avoid the heartache they will experience at check-in,” Tim concluded.

The South African government just made it a bit easier to gather those documents needed when a minor is traveling to its country.

The South African Department of Home Affairs recently announced changes to South African entry requirement for minors born in the country who have a current South African passport.

According to Tim Clyde-Smith, South African Airway’s Country Manager for Australasia, people under 18 who are South African citizens and hold a valid passport will no longer require birth certificates which contain parental details to enter the country.

“This new arrangement, effective immediately, applies only to minors who have SA citizenship travelling from other countries (including Australia and New Zealand) to South Africa and who will not need the additional paperwork required until now,” Tim said.

“Those travelling and travel agents and partners should note that all other current arrangements for minors travelling remain in place and must be complied with in accordance with South African laws.

If in doubt they should contact the South African High Commission in Canberra on 61 2 6272 7300 for further information,” Tim said.

MOZAMBIQUE: Air Travel In Mozambique?

Many companies have professed an interest in Mozambique’s domestic air market, but they have all given up in the end. Why, no one knows. But the Civil Aviation Institute of Mozambique (IACM) thinks that perhaps the market is not so attractive.

The Mozambican Civil Aviation Institute (IACM) this week launched a public tender for the allocation of domestic, regional and intercontinental air routes, at a time when the country is experiencing a crisis in the passenger air transport sector. DW Africa talked with IACM spokesman Francisco Cabo.

DW Africa: Is this tender being launched a response to the parlous state of Mozambique’s air transport services, and in this sense the result of President Filipe Nyusi visit to LAM, or is it just normal IACM procedure?

Francisco Cabo (FC): This is a normal procedure. The Civil Aviation Institute of Mozambique (IACM) regularly launches these competitions so that national and international operators can compete to offer, within their capacities, their services on the routes that are established.

DW Africa: There have been companies in the past which have expressed an interest in operating domestically, for some years. What has prevented the entry of these operators into the Mozambique market?

FC: From a legal point of view, nothing. We have received requests from operators to operate in the domestic market. It must be taken into account that in the Republic of Mozambique we have 17 licensed operators. The fact is that most of these operators have targeted the charter segment.

Another reason is the International Civil Aviation Organization’s internationally defined standards, with five certification phases that all operators have to go through in order to start operating in Mozambique. Not long ago, we had two companies in the certification process, one of which completed all the phases then decided not to do go into operation after all.

DW Africa: What were the reasons for this last minute change of heart?

FC: No official reason was presented to the IACM. We assume that there were reasons related to the airline itself. We have not received any notification.

DW Africa: It is quite ridiculous that many Mozambicans go to South Africa first, in order to reach Nampula in their own country, using international airlines such as South African Airways.

FC: Yes, but we have to look at conditions in our market. For example, Mozambique is on the European Union’s blacklist. So what you mention has to do with this specific situation that we are experiencing. Large companies setting up in Mozambique end up creating these situations by barring their workers using national airlines, so we have this situation.

DW Africa: Is the Mozambican air market attractive enough to arouse interest from international air operators?

FC: You have to look first at the structure of the market. We are talking about a country where we have approximately 24 million people. Of those, how many actually travel by plane? From the domestic point of view, only about 600,000 people a year. This is less than that in the South African market. So our analysis of this issue must begin there. Why do we not have large companies operating on domestic flights? Perhaps there is not so much the attractiveness of a very big market. The air transport market in Mozambique is not as elastic as it may seem.

Fastjet Appoints Sylvain Bosc New CCO

Fastjet boss Nico Bezuidenhout completed his raid on other airlines executive suits when he brought his latest recruitment, the new CCO Sylvain Bosc on board, who also previously worked at South African Airways.

The growing team of aviation specialists recruited filled the last gap this week as former South African Airways Chief Commercial Officer Sylvain Bosc joins the carrier to lead its commercial activities. He succeeds Richard Bodin who opted not to move to Johannesburg when the airline relocated its head office from Gatwick Airport.

Sylvain joins a team of industry heavyweights assembled by CEO Nico Bezuidenhout to rebuild, restructure and redevelop the business.

Sylvain's credentials include a highly successful tenure as Chief Commercial Officer at French carrier Corsair, prior to which he was engaged as Group Strategic Planner for the Air France KLM Group as well as holding several key commercial positions at Air France earlier in his career.

'Fastjet holds significant potential as a business' says Bosc before adding 'and righting the business and positioning it for inevitable growth is an absolute priority'. He then also said that the concept of a truly pan-African low-cost airline, making air travel accessible to the second most populous continent after Asia, presents a significant socio-economic and commercial opportunity.

The impact of mobile telephony on the continent has networked markets and contributed substantially to increased economic growth in Africa. The potential for aviation, and low-cost travel, is not dissimilar. 'There has been a marked stimulation of tourism and trade growth in markets where fastjet operates.

Typically, aviation fulfils a significant role in the development of these two sectors as well as empowering publics who have not had the opportunity to fly before' commented Bosc further before concluding: 'I look forward to fastjet partnering with relevant authorities, governments and private industry to further fuel growth on the continent'.

CEO Nico Bezuidenhout believes that the team he has now put in place represents the top talent in aviation with appointments reflecting the direction of the business. 'Fastjet already holds substantial market share on routes that it operates and plans are that it will become the market leader on the continent' said Nico, 'Sylvain’s appointment will go a long way to re-establish a solid and formidable commercial foundation. His experience, particularly in Africa, insight and lateral thinking will stand fastjet in good stead'.

NIGERIA: South African Airways Introduces Flights To Abuja

South African Airways (SAA) has introduced a second entry point to Nigeria in its quest to enable trade and unlock mobility, which will considerably add to business travel options in the West African region.

Adding a second gateway in Nigeria to SAA’s existing daily service to Lagos materially strengthens SAA’s position in West Africa. The addition of Abuja to SAA’s network follows closely on the successful introduction of the Accra, Ghana to Washington Dulles, USA route, as a West African platform in August 2015. SAA launched flights between Accra, Ghana and Washington DC in North America.

The introduction of the Accra to Washington route has seen a steady growth in the number of passengers using this route and has performed in line with expectations. This has provided SAA with the confidence to invest further and enhance its footprint in West Africa.

“Nigeria is one of the fastest growing air travel markets in Sub-Saharan Africa and will be well served with our additional services to Abuja. Introducing Abuja as a second entry point in Nigeria will add more travel options, especially for the business community, and will enhance our footprint on the continent,” says Sylvain Bosc, SAA Chief Commercial Officer.

Abuja, built in the 1980s, became Nigeria’s capital in December 1991, and is known for being one of the few purpose-built capital cities in Africa. With Abuja, SAA will be serving eight destinations in Central and West Africa, with flights from its Johannesburg hub to Lagos (Nigeria); Abidjan (Ivory Coast); Cotonou (Benin); Accra (Ghana); Douala (Cameroon), Dakar (Senegal) and Libreville (Gabon) already forming part of the extensive regional route network.

The three weekly flights will operate non-stop between Johannesburg and the Nnamdi Azikiwe International Airport in Abuja aboard modern Airbus 330-200s, offering SAA Business class comfort and luxury, with the latest in In-flight entertainment.

The first flight is scheduled to depart O.R Tambo International Airport on 26 January 2016. Flights are open for sale on all SAA’s distribution channels.

MAURITIUS: Air Mauritius Searches For New CEO

After removing the former CEO Megh Pillay during a turbulent board meeting at the end of October, Mauritius Airlines I searching for a new CEO.

While Mr. Raja Buton, who had previously acted as CEO, was brought back into the hot seat for the time being to hold fort, and to satisfy regulatory requirements as an acceptable accountable manager for the Mauritius CAA, is reportedly a head hunt now underway to find a permanent solution.

Pillay only served for eight months in the job but reportedly locked horns once too often with key members of the Board of Directors, eventually rendering his position untenable when a properly constituted meeting then decided to hand him the sack.

Pillay is another one of former CEO's of Air Mauritius falling foul of the power that be, including Andre Viljoen, who rose to the position after joining Air Mauritius from South African Airways initially as CFO in 2009.

Initially elevated to Acting CEO and eventually confirmed in the job was Viljoen credited for putting into place a harsh cost cutting programme which saw routes axed and aged aircraft lined up for replacement besides other austerity measures.

Viljoen in October last year did not return to Mauritius from his scheduled leave and is now working at Fiji Airways, after a number of allegations were made against him, none proven however in a court of law.

It is understood that there are plenty of applicants but few of the industry's top names, considering the history of Board / CEO relations in the past almost entirely understandable.

A decision by the company on the recruitment of a new CEO is expected to be made public in early 2017.

Fastjet Negelects Nairobi And Entebbe, But To Relocate To South Africa 2017

Fastjet's new Chief Executive, Nico Bezuidenhout, would sooner or later be looking at the South African domestic market, now that key decisions are out of the way.

A relocation in early 2017 from London Gatwick to Johannesburg will take the head office of the airline into the African continent where operations actually take place, for now in Tanzania on domestic and regional routes and in Zimbabwe on one domestic route to Vic Falls and twice daily to Johannesburg.

Other decisions taken was to phase out the Airbus A319 fleet thought to be too large to operate profitably on other than high density routes and while presently only one Embraer E190 is flying for Fastjet are more expected in due course.

Information from usually reliable sources have now indicated that CEO Nico is eying the South African domestic market, where of course for the past decade before joining Fastjet he managed Mango, South African Airways' LCC.

This, if proven to be correct, would be an indicator that both Zambia and Kenya may go on the back burner though considerable work and resources have flown into getting operating licences and relevant permits to commence operations in these two countries.

Given the level of competition in South Africa in the LCC segment however, with other established players being Kulula among others, owned by Comair, a British Airways affiliate, and given that a former Fastjet Manager, one Kyle Haywood, failed to get the airline off the ground and subsequently left Fastjet, will Nico however have his work cut out for him, to consolidate on one side and push for expansion on the other into a notoriously hard fought over market as South Africa is.

If Fastjet goes ahead it will also have to review their business model which up to now saw Fastjet PLC hold 49 percent of the shares of the two companies in Tanzania and Zimbabwe, leaving the remaining 51 percent controlling interest in the hands of local investors. South Africa however has a lower threshold of just 25 percent of shares being permitted to be held by a foreign investor, something Fastjet's board no doubt will have to take a hard look at.

For now though are the few remaining flights from Dar es Salaam to Entebbe and Nairobi underway before, on 05th December, both services, alongside flights from Vic Falls to Johannesburg, will be halted until further notice.

Ethiopian Airlines Make More Profit Than All Other African Carriers Combined

Ethiopian Airlines’ $175 million profit for the 2014/15 fiscal year it announced at the end of last week is more than what the rest of Africa’s airline industry posted over the same period.

Tewolde Gebremariam, Ethiopian Airlines chief executive, said the airline, which has been the most profitable in Africa for a couple of years now, exceeded its revenue and profit targets for the fiscal year.

“We had planned for 43 billion birr by 2015, but in the last fiscal year closed at about 49.4 billion birr in revenue. The same with profitability,” Gebremariam told CCTV Africa.

The state-owned carrier said it plans to increased it fleet to 140 planes by 2025 when it expects to be generating over $10 billion on annual revenue. At the moment it has 76 planes and recently announced plans to increase this by 60 percent by buying 44 new aircrafts.

While other major African airlines, including Kenya Airways and South African Airways, fall deeper into loses, Ethiopian Airlines has grown its revenue and expanded its routes to become the most networked carrier on the continent.

Collectively, Other African Airlines are expected to post a profit of barely $100 million the lowest of all regions, according to the International Air Transport Industry Association (Iata). They are also expected to see the slowest growth among developing markets with capacity and demand expansion of 3.3 percent and 3.2 percent respectively this year.

Frustration With SA Visa Rules

There is growing frustration in South Africa's tourism industry as the fallout from onerous requirements becomes clear, with fewer tourists visiting the country and hotel rooms left empty.

The new regulations - which make it more difficult for travellers with children and for visitors from countries such as China that require visas - are biting at a time when the South African economy badly needs a boost.

South Africa's home affairs department has said the measures are intended to prevent child trafficking and government officials claim 30 000 children are trafficked in the country every year.

However, the department has recorded just 23 cases of child trafficking over the past three years.

Grant Hughes, 45, from Suffolk, was booked to fly from Heathrow to Addis Ababa and on to Durban with Ethiopian Airlines last Wednesday.

He was travelling with his fiancée to the city for their wedding and was accompanied by his children, 11 and 15.

But the airline, which had not told them birth certificates were obligatory, refused to let them board the plane.

Responsibility rests with passengers to ensure they have the necessary documents to enter a country.

Airlines face fines from the South African authorities if they carry passengers under 18 who do not have a birth certificate and are therefore inadmissible.

“I would have accepted it had it just been me who had made an oversight,” said Mr Hughes.

“However, we were told that this is a regular occurrence and roughly 10 families a night are being turned away across various airlines.”

David Frost, chief executive of the Southern African Tourism Services Association, said: “It's an appalling way to behave when we should be doing everything to foster tourism. With the rand so favourable, we should have had double-digit growth but, out of the UK, we have been basically flat.” On a typical long-haul flight departing for South Africa, he said, between 10 and 20 people are being denied boarding.

British Airways, Virgin Atlantic and South African Airways, which fly direct from the UK to Johannesburg and Cape Town, say they do all they can to inform passengers about the rules.

BA emailed all customers who have travelled to South Africa in the past year, as well as those with advance bookings.

The majority of denied-boarding cases known to The Independent involve passengers who book through online travel agents for airlines that do not fly direct.

A leading travel industry figure, who did not want to be named, said: “South Africa looks intent on shutting down family tourism. Kenya and Tanzania can't believe their luck - this is the best promotion they've ever had.”

Lorenzo Fioramonti, a University of Pretoria professor and Unesco chair in regional integration and migration issues, said criminals behind child trafficking “can easily bribe officials or forge [birth] certificates to travel... Any graphic designer with basic abilities could forge one.”

An official at Johannesburg's main airport was recently suspended over accusations he tried to solicit a “fine” from a group of schoolgirls on a student exchange by claiming they had the incorrect documents, according to the Association of Southern African Travel Agents.

Other tourists have been prevented from boarding flights, included a group of Dutch teenagers travelling to do aid work.

In a separate immigration requirement, as of last year visitors from countries requiring visas, such as China and India, must apply in person at a South African office in their home country so that their biometric data can be collected.

Often this would mean a flight to the nearest big city so many tourists are simply choosing to go elsewhere.

An open letter from 20 international airlines last year warned that the immigration requirements would be a “tourism, PR, economic and political disaster”.

The South African government conceded in October that the new rules had had “unintended consequences” and promised a number of revisions but domestic tourism officials say it is dragging its feet on implementing changes.

MAURITIUS: Airlines Partner With Mauritius To Promote Tourism

Mauritius is working closely with airlines, including South African Airways, to transport more people from the African continent to experience tourism and investment on the island.

The move is also intended to help people on the continent to integrate and share ideas while making Mauritius the preferred holiday destination instead of the Americas, Europe or Asia.

The Director of Mauritius Tourism Promotion Authority, Mr Kevin Ramkaloan, said this in an interview with the Daily Graphic on Thursday.

This formed part of activities lined up for two media houses in Ghana and key travel and tour agencies in Ghana to explore the tourism potential of that country.

The five-day visit under the auspices of South African Airways, Ghana office, is also designed to allow the group to experience the rich culture and tradition and the most of the luxury hotel apartments on the island, visit places of interest and ascertain the investment opportunities thereof.

Led by the Country manager of South African Airways, Ghana, Mrs Gloria Yirenkyi, some of the places visited so far included the Botanical Gardens where all tree species could be found, the Sugar Museum which is a converted sugar factory into a massive Museum attracting hundreds of visitors a day and the water front of the luxurious Zilwa Hotel, one of the nine hotels run by a company called Attitude, The African Leadership University among others.

“We have all it takes to host people from Africa and that is the more reason why we have opened up our doors for people to come and experience what we have,” he said.

He said Mauritius had some of the best luxury hotels comparable to any in the most advanced countries in the world, capable of meeting the needs of visitors from the continent, and added that the island hosts lights festivals, which attracts up to 450,000 people from all over the world.

“We host the best festivals where we display the rich culture and tradition of the Mauritius people, host world-class international conferences, attract groups and couples and families to experience the best of the country and most of all boast of security for the visitors,” he added.

Mr Ramkaloan said with tourism leading as the largest contributor to the island’s Gross Domestic Product (GDP), there was every indication that the country was focused and well positioned as far as tourism was concerned.

For instance, tourism contributed more than $1.6 billion to the economy last year with a potential increase by an average of 10 per cent because of the level of seriousness the authorities have attached to the sector.

He described the island with a population of less than a million-and-half people with about 40 per cent of the land covered with sugar plantations, as unique in all fronts with some of the best beaches.

“We have water sports and people have the opportunity to ride jet skis under water, host wedding ceremonies under the sea, among many others. What we do here is amazing and it is not for nothing that we have positioned the island as the best and most affordable tourist destination,” he added.

The Sales Executive of South African Airways in Mauritius, Madam Jessica Huet, said the airline had also positioned itself to be the most preferred airline to help transport visitors from all over Africa to experience the island.

She said the airline was promoting the unique activities of the island such as sports, including golf and cycling; and medical tourism where it had liaised with some medical institutions to offer the best medical care for the most dangerous illments.

Madam Huet said although the airline was in competition with other airlines, it had always remained unique because of the affordable tickets and the services rendered by the airline.

She said the airline was also working closely with travel and tour agents to design appropriate packages for families, groups, couples, among others, to fly to experience the diversity of Mauritius.