In addition to route cuts and job cuts, South African Airways may also be selling two highly desirable slots at London Heathrow Airport. This is according to recent reporting by Bloomberg and its sources familiar with the issue. These moves are part of a larger business rescue plan that has been initiated to keep the financially-struggling airline from collapse.
The sale of slots
According to sources familiar with the issue, SAA is looking to sell two of its prized night-time operating slots at Londons Heathrow Airport. According to Business Day, the carrier is currently only using one of the two takeoff and landing slots. However, it could drop the other night-time slot and shift its London-Johannesburg flights to a cheaper daytime schedule. This would reportedly also reduce costs as the turnaround time would be shorter.
The sale of the highly-desirable night slots at Heathrow could raise some much-needed cash for the struggling airline. According to The Points Guy, depending on the time of day, slots were worth £5 to £15 million around 10 years ago. Nowadays, however, numbers aren’t disclosed to the public. We do know that an increase in competition and air traffic at Heathrow has driven up the prices substantially.
This was demonstrated with Oman Air’s 2016 noteworthy deal to buy two slot pairs at Heathrow for £58 million from Air France-KLM. The following year, Scandinavian Airlines revealed that it sold two slot pairs at the airport for almost £60 million.
When asked about the possibility, South African’s spokesperson had this to say:
“SAA continues to operate to London and this has been confirmed by network changes recently announced by the business rescue practitioners … This means the current Heathrow slots remain within SAA’s overall portfolio.”
The value of a night-time slot for passengers
With an 11-hour journey from London to Johannesburg, a night-time slot allows travelers to sleep in the air and wake-up at their destination at a reasonable time of day when transportation options are most available at the airport.
Perhaps equally as important isn’t what’s happening on-arrival in Johannesburg as much as what goes on in London before the flight. This is because most transatlantic flights from North America depart in the evening as overnight flights. Arriving sometime in the afternoon, this allows North American travelers sufficient transit time. This is mostly the case if they are connecting onwards to a night-flight to the Middle East or Africa. Furthermore, it would allow European passengers the luxury of a mid-day or afternoon flight to Heathrow, rather than something extremely early in the morning.
Therefore, should SAA move to a day-time slot, it could potentially lose out on connecting traffic from North America through any codeshare partners it may have agreements with. However, this would be slightly mitigated due to the existing service from New York’s JFK airport.
The competition from Heathrow as it currently stands is British Airways and Virgin Atlantic. Both airlines operate overnight services to Johannesburg, departing Heathrow around 2100-2200h.
We’ll just have to wait and see if the reports are true. While it may not be the magical answer to SAA’s financial issues, it may be necessary to help it survive in the interim as it undergoes restructuring.
Do you think SAA should sell these slots? Or would it lose out more in the long run with the switch to daytime slots at Heathrow? Let us know in the comments!