Cash strapped South African Airways has launched a new fundraising initiative. In a bold move, the airline is looking to sell off a number of its A340 aircraft as well as spare engines and auxiliary power units (APUs) for those planes.
South African Airways has been in some financial difficulties for some time. Now, it seems the airline is looking for creative ways to dig itself out of its debt laden pit, by putting up a bunch of its aircraft for sale.
According to a tender proposal seen by Simple Flying, the airline is requesting bid to buy a number of its A340 aircraft. In total, there are nine A340s up for sale, as well as 15 spare engines and 4 APUs. The aircraft that are up for sale include four A340-600s and five A340-300s.
The tender has been live since the 10th of January, and interested parties have until the 30th January to submit their bids. It appears that the sale is linked to a ‘business rescue’, as it states in the proposal:
SAA is currently under Business Rescue in line with the South African Companies Act and a Business Rescue Practitioner has been appointed who has approved the sale of the assets as mentioned in the Request for Proposal.
Which aircraft will be sold?
According to the tender, the aircraft up for sale are as follows:
Bizarrely, many of these aircraft are still in active service. Of the -600s, ZS-SNC is regularly running between JNB and FRA, while ZS-SND, ZS-SNF and ZS-SNG are all regulars on the JNB to JFK route.
Of the -300s, ZS-SXD just got back from Hong Kong, ZS-SXE goes from JNB to Munich (MUC), SXF runs between JNB and Perth (PER) while SXG is frequently on the popular Johannesburg to Cape Town route. Only ZS-SXH appears to be out of use right now.
Happily, neither of the aircraft involved int that stunning flypast last year (ZS-SNE and ZS-SNH) are not included in the sale.
Altogether SAA has seven A340-300s and nine A340-600s in its fleet. This sale will, therefore, see SAA disposing of a large portion of its A340 fleet.
Why is SAA selling these planes?
Simple Flying reported back in December that the government was set to restructure SAA, following strikes by its workers and years of financial strife. The South African government was looking to take steps to improve SAA’s profitability and save it from a state of bankruptcy.
At the time, the South African government said,
“SAA … cannot continue in its current form…The airline group will now go through a radical restructuring process which will ensure its financial and operational sustainability. There is no other way forward…The [government] is committed to a viable, sustainable, profitable national airline. It is our collective responsibility as South Africans to support SAA in its efforts to restore sales confidence among its customer base and rebuild revenues in the shortest possible time.”
At the time, no details emerged regarding exactly what this would entail. Now, it seems we are seeing the first of the measures being put in place to improve the airline’s financial standing.
For the A340-600s, with so many on that New York route, it would make sense that these birds would be looking for retirement. SAA is racking up the number of brand new A350s in its fleet, which offer far more economical trips between South Africa and the US east coast.
While there doesn’t seem to be a clear plan for a replacement for the airline’s A340-300s, the sale is likely to take some time to materialize. This means SAA has plenty of time available to change its schedules or even lease different aircraft to maintain its capacity on these routes.
What do you make of this? A good move for SAA in the long run? Let us know in the comments.