South African Airways is considering disposing of SAA Cargo as part of the company’s restructuring. The Public Enterprises Budget Summary published together with the national budget states: “Different scenarios are being considered for disposing of the cargo unit”. Finance minister Trevor Manuel announced a R1.6-billion package for SAA in his budget speech. According to Public Enterprises, “South African Airways has met cost reduction targets and made operational improvements”. It also identified initiatives that were not outlined in the initial restructuring plan, resulting in a 36% above target performance by the middle of 2008/09. According to the report, SAA is benefiting from the recent reduction in fuel prices, “but the global economic slowdown and increase in foreign exchange rates will have a negative impact going forward. “The lower and more sustainable cost level will, however, enable SAA to take advantage of improvements in the economy when these arise. The profit target is being reviewed in relation to other network airlines in the industry, and will be included in the February 2009 corporate plan”. In September 2008, SAA completed the valuation of SAA Technical and will proceed with the process of conducting a due diligence exercise before an equity partner is identified. The sale of Air Chefs is about to be concluded, “and the process of commercialising Voyager” has started.
