South African Airways Forced To Cut 20 Routes

South African Airways

IATA/ICAO Code:

SA/SAA

Airline Type:

Full Service Carrier

Hub(s):

Johannesburg Airport

Year Founded:

1934

Alliance:

Star Alliance

CEO:

Thomas Kgokolo

Country:

South Africa

National carrier South African Airways has been on quite the turbulent flight path after restarting operations last September. The airline underwent a lengthy business rescue procedure that left it trimmed in several aspects; fleet and routes-wise. Since then, South African Airways has tried to carry out flight operations to its remaining 52 international routes as efficiently as possible.

An even smaller route network

Unfortunately for the African carrier, its efforts were not enough. Despite already being at a less-than-ideal size for a national carrier, South African Airways is having its international network further trimmed down as it lost rights to at least 20 unflown routes.

Seeing that South African Airways has been unable to provide sufficient capacity or prove that it would eventually offer adequate service capacity, the International Air Services Licensing Council has revoked 20 of the airline's 52 international licenses.

South African Airways Airbus A320 Takeoff

South African Airways primarily flew South African and pan-African destinations when it restarted operations, due to its smaller fleet. Photo: Airbus

The revoking procedure was done without negotiations, as the council saw that these routes had not been serviced in more than three months. Specifically, the axed international routes remained unserviced since March 2020, when South African Airways was grounded to undergo a business rescue.

Shortage of seats, rising passenger demand

Before South African Airways underwent a business rescue, the national carrier had more than 40 aircraft deployed across its fleet. However, as mentioned, the airline was severely trimmed down when it emerged into operations with less than 10 aircraft, mostly narrowbodies with only a couple of widebodies. Given such a small fleet, the airline could only actively service South African and pan-African routes.

And since South African Airways couldn't expand its fleet, given the state of the African aviation industry, the airline was unable to service its vast international network so soon. Now, after having lost licenses to 20 routes, there is a more significant shortage of seats for international routes, coming at the wrong time as passenger demand is soaring.

South African Airways had hoped to expand its fleet in strategic phases, but things were not going as smoothly. Photo: G B_NZ via Wikimedia Commons

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The gap remains unfilled

With rising demand and opportunity comes hungry competition from several African airlines as they hint at their ambitious interest in starting flights on the axed international routes. Still, filling the gap might take time, considering the International Air Services Licensing Council has not been reconstituted appropriately due to the pandemic.

Considering the current state of the African aviation industry, where it remains relatively untapped due to mismanagement and corruption, the chances of African airline competitors taking up the international routes are pretty slim. Nonetheless, as the national carrier, South African Airways is hopeful that it will eventually regain its licenses and return to its former glory days.

South African Airways is at a crossroads

However, the airline would require much funding to expand its fleet for more flight operations. The budget was supposed to come from The Takatso Consortium, a company named as an investor in South African Airways after its business rescue last year, to help it stay off state funding, with the company buying a 51% stake for 51 Rand ($3.16).

While it might take more than $3.16 to get South African Airways back to its former glory, it would still help the airline sustain a more viable fleet. Photo: Airbus

Unfortunately, the financial deal is yet to be solidified as the company is still clearing off regulatory hurdles, which are expected to be done by the last quarter of the 2023 fiscal year. The Department of Public Enterprises said:

"They have the money and want this done sooner than later. In any transaction, money will not flow until it gets the green light. We are waiting for the approvals and regulatory hurdles; after that, there will be a change of ownership. We expect to see money flow into the airline after that."

Since it seems to be a waiting game for South African Airways to get the required funding, the airline remains at a crossroads. With a small fleet and even smaller international network due to the new cuts, the national carrier certainly lost some of its attractiveness to potential investors or partners. With a much smaller global route network, South African Airways' title as the national carrier is getting further diminished.