SAA Cargo reports back on restructuring progress

SAA CARGO’s search for a strategic equity partner is well under way and an announcement can be expected in the near future. That’s the word from SAA Cargo GM Patrick Dlamini who sees hugely positive impact from the corporatisation of the division, with a BEE equity partner likely to be drawn from the private sector. “You can expect to see better figures when the annual report is released – in fact the cargo division has managed to maintain turnover and market share in the first months of the year despite a significant loss of capacity. This after the withdrawal of its Boeing 747 widebody aircraft in November last year and the termination of Paris and Zurich flights. We would have grown 20% this year if not for the loss of capacity,” Dlamini told FTW. “Efficiency and profitability will be paramount for the future in order to ensure a meaningful return for shareholders.” First priority to achieve this goal will be fleet renewal. “There have been big developments with the competition using more fuelefficient aircraft, a factor that SAA cannot ignore in light of the escalating fuel price.” New aircraft will mean additional capacity with the obvious knock-on effect for cargo. But to deliver on its mandate, the airline needs to focus on the efficiency of current operations, and a key area involves ground handling across the globe. In Africa for example, it’s extremely expensive, and where possible the objective is to set up its own ground handling operations or close co-operation with current operators. “It’s an area that can make or break the airline’s profitability.” In terms of growth and expansion, Africa will remain a key focus. “We believe there are huge opportunities that will yield good returns. “From an SAA passenger point of view they will be looking at increased frequencies on current routes – West Africa, East Africa and the Great Lakes region in particular – which is positive news in terms of capacity for us.” Globally, South America and Asia are important targets. Hubs on the continent are also a critical focus. “SA will become a serious hub for the Sadec region but we want to set up a West Africa hub and would look at a third option as well. The concept is critical in order to balance cargo flow through feeding and defeeding for international routes. And here the critical shortage of warehousing capacity needs to be addressed, with a strong emphasis on the consignee and customs playing their roles to facilitate speedy cargo throughput. Reskilling, retraining and incentivising staff in order to keep them motivated and take the airline to the next level are also high on the agenda. SAA Cargo has always been a lean operation, says Dlamini, with staff cutbacks amounting to just 80 of the 600-strong complement, and no further cuts envisaged.