SAA has just announced it drop its second daily JNB-LHR and lease out its second Heathrow slot. It will also change aircraft to its new A330-300 in an attempt to refresh the brand on the route. Should the route prospect improve the second slot will be reinstated.

Big move but given the state of their financial performance, a solid move to at least try and stem the red ink.

Not sure if BA/SAA have a Pool Agreement allowing SAA to share revenues in a proportion that differs from capacity deployed. Alternative is some “dangeld” payments to SAA. Given UK capacity and feeds both in LHR/CPT/JNB would have thought some protection in place for SAA.

who will get that slot?

Didn't SAA used to have like 2 x daily B744's on the JNB-LHR route? Plus the CPT flight. Why the drop in capacity over the years?

8herveg wrote:

Didn't SAA used to have like 2 x daily B744's on the JNB-LHR route? Plus the CPT flight. Why the drop in capacity over the years?

Because they have been losing money for years to London. If not for politics/ego route likely would be dropped entirely long time ago.

Can the A330-300 get out of JNB with a decent payload to LHR? This was the whole reason they used A346/A343 and latterly A332? Not too long ago we had three B747s per day, two to JNB and one CPT.

When SAA lost BMI codeshare that was the end of LHR connectivity into rest of UK.

I dont understand them, BA had double daily A380/744, VA daily 789 this was supposed to be their profitable route, if not then where else will they make good profit

skipness1E wrote:

Can the A330-300 get out of JNB with a decent payload to LHR? This was the whole reason they used A346/A343 and latterly A332? Not too long ago we had three B747s per day, two to JNB and one CPT.

Apparently SAA received the newest 242t A330-300 that can lift a bit more out of JNB.

Based on Airbus ACAP docs, it should be able to lift close to 240t if it uses the 14,000 ft runway. The other runway is shorter (11,000 ft) and would limit the aircraft at 230t.

Drastic times, drastic measures. Good move to at least try and turn this almost sunken ship around, maybe a bit late though...but think this new CEO knows a bit more what he's doing and took the decision to take tough and hard decisions and try and push through.
Hopefully they can make something out of leasing out the other slot also in the meantime. If the A333 have to take a payload hit, it might still be better than using the A332, since the A333s are bit more premium heavy and with a very good new business class product.
Other severe cuts have taken place already, domestic and regional...yesterday mention of JNB-NBO cutting to 9 weekly from 11 (on the same day KQ announcing 3 more weekly nonstop NBO-CPT, taking their NBO-SA flights to 31 weekly)...JNB-LAD is down to 2 weekly A320 (a few months ago was still daily A330/A340). Many other regionals reduced and cut. Domestic cuts on all routes (CPT,DUR,PLZ,ELS)...mostly switched over to Low-Cost arm Mango.
Think the last 737-800s have been removed from operating or will soon, some going back to lessors, 3 or 4 going over to Mango. 2 older A320s that was on lease have been returned. Think some A340-300s to be parked soon, already one less.

KarelXWB wrote:

skipness1E wrote:

Can the A330-300 get out of JNB with a decent payload to LHR? This was the whole reason they used A346/A343 and latterly A332? Not too long ago we had three B747s per day, two to JNB and one CPT.

Apparently SAA received the newest 242t A330-300 that can lift a bit more out of JNB.

Based on Airbus ACAP docs, it should be able to lift close to 240t if it uses the 14,000 ft runway. The other runway is shorter (11,000 ft) and would limit the aircraft at 230t.

An A330 will never get near 240t out of JNB. Using an Airbus FlighSmart program with the following conditions:

Rwy 03L
HW 5kts
QNH 1020
Optimum flap
Runway dry
Air con Off

the A333 can only get airborne at 231.5t. Should be enough though as SAA's A333's only have 248 seats.

It seems that they are just in the wrong alliance. They need to be in ONEWORLD for connectivity to Australia, UK, JFK, GRU,
& HKG and a codeshare with Comair of South Africa.

mercure1 wrote:

8herveg wrote:

Didn't SAA used to have like 2 x daily B744's on the JNB-LHR route? Plus the CPT flight. Why the drop in capacity over the years?

Because they have been losing money for years to London. If not for politics/ego route likely would be dropped entirely long time ago.

Which begs the question: how come do they lose money on JNB-LHR?

Its a shame to see. Use to see their A340s parked up at LHR maintenance area every time I went. It does beg the question how they are losing money though, what's the LF like?

It makes sense, unfortunately, the airline world and SAA are very different from the days of 2 X 744 JNBLHR & 1 X 744 CPTLHR. When you have an airline run by a semi-communist Ineptocracy you shouldn't expect anything better. Yes, they are probably in the wrong alliance and maybe some A-net members would choose a different fleet for them. But whatever the fleet or the alliance or if they have the free fuel they will still lose a shed load of money while they are "run" by a team appointed and controlled by the current government.

It's almost surreal how far SA have fallen over the years, sad. Perhaps it's time to privatize it by selling a majority to a local entity,even if it potentially ended up being taken over by Comair and switched to the Oneworld alliance.

South Africa's geographic position gives SAA a disadvantage. Its success is dependent on how well its country's economy is doing, and is dependent on the strength of O&D traffic. It does not have the advantage of being a hub beyond southern Africa. I don't know how much value SAA brings to Star Alliance TBH.

KarelXWB wrote:

skipness1E wrote:

Can the A330-300 get out of JNB with a decent payload to LHR? This was the whole reason they used A346/A343 and latterly A332? Not too long ago we had three B747s per day, two to JNB and one CPT.

Apparently SAA received the newest 242t A330-300 that can lift a bit more out of JNB.

Based on Airbus ACAP docs, it should be able to lift close to 240t if it uses the 14,000 ft runway. The other runway is shorter (11,000 ft) and would limit the aircraft at 230t.

According to the chart, figuring JNB at 5.5 kft altitude and 14 kft runway, you'd be looking at more like 220 t?

WW had better sign the contract for those additional BA A380s soon; the prospect of double daily A380 year round to JNB has just got much closer!

T54A wrote:

When SAA lost BMI codeshare that was the end of LHR connectivity into rest of UK.

I don't see that as being integral to making money on JNB-LHR. Quite frankly, this route should be making money.

If regional UK connectivity from within the UK was such an issue, they could have operated into MAN and codeshares with BE. As it happens, they can offer similar UK connectivity with LH via MUC and FRA.

berari wrote:

South Africa's geographic position gives SAA a disadvantage. Its success is dependent on how well its country's economy is doing, and is dependent on the strength of O&D traffic. It does not have the advantage of being a hub beyond southern Africa. I don't know how much value SAA brings to Star Alliance TBH.

Although I guess in that case AR at EZE and LA in SCL would be in the same situation?

SonOfABeech wrote:

Which begs the question: how come do they lose money on JNB-LHR?

Well when they dropped CPT-LHR their chief complaint was a continual erosion in market pricing and lots of competition (such as ME3 options).

While UK-SA is certainly not a small market, there is indeed dozens of options to get between them, so suspect JNB-LHR likewise is not the gold mine they wish for.

LAXintl wrote:

SonOfABeech wrote:

Which begs the question: how come do they lose money on JNB-LHR?

Well when they dropped CPT-LHR their chief complaint was a continual erosion in market pricing and lots of competition (such as ME3 options).

While UK-SA is certainly not a small market, there is indeed dozens of options to get between them, so suspect JNB-LHR likewise is not the gold mine they wish for.

VS also dropped CPT-LHR a while back, so I wonder how is BA doing on the route?

Regarding JNB-LHR, if BA are doing double daily on a 380 (in winter/southern summer), plus VS daily on a 789, the route can't be bleeding that much to the ME3 and must still be quite lucrative, no? Or are BA and VS soft too?

I think I read somewhere that FRA, MUC, and PER were the only profitable destinations for SA outside of Africa. That means JFK, IAD, GRU, LHR, and HKG are loss making I assume.

FRA and MUC must perform pretty well, considering that they are both Star Alliance hubs and that there are many onward connections on LH and other airlines. I assume there is a large African population serving PER, which makes the route profitable. But besides that, everything else seems to be a loss sadly.

alan3 wrote:

berari wrote:

South Africa's geographic position gives SAA a disadvantage. Its success is dependent on how well its country's economy is doing, and is dependent on the strength of O&D traffic. It does not have the advantage of being a hub beyond southern Africa. I don't know how much value SAA brings to Star Alliance TBH.

Although I guess in that case AR at EZE and LA in SCL would be in the same situation?

Indeed they are. That is why AR struggles with its long range network and why the brain trust at LA realized 15 years ago that they were doomed to irrelevance unless they did something. Enter the expansion into Peru, the LIM hub, the affiliates in Argentina and Colombia and the bold move, acquiring TAM, that gave them access to the region's heavyweight, Brazil.

You can also say that both QF and NZ are in the same boat. That said, these airlines serve markets that are more economically developed and can rely on strong O&D traffic.

MARSHAL1 wrote:

It seems that they are just in the wrong alliance. They need to be in ONEWORLD for connectivity to Australia, UK, JFK, GRU,
& HKG and a codeshare with Comair of South Africa.

Hmmm, never thought about that before, although I rarely give a, about SA. Yes, you are spot on!

MARSHAL1 wrote:

It seems that they are just in the wrong alliance. They need to be in ONEWORLD for connectivity to Australia, UK, JFK, GRU,
& HKG and a codeshare with Comair of South Africa.

Star is definitely the wrong alliance for SAA, One World would help them out in all the English speaking markets they fly to. The UK, the USA, Hong Kong, Australia and Brazil are all OW strong holds.

The reduction of double daily service on the LHR route to once daily with an A330-300 will generate cash for SAA, leased LHR slots cost about 200,000 USD monthly.

alan3 wrote:

LAXintl wrote:

SonOfABeech wrote:

Which begs the question: how come do they lose money on JNB-LHR?

Well when they dropped CPT-LHR their chief complaint was a continual erosion in market pricing and lots of competition (such as ME3 options).

While UK-SA is certainly not a small market, there is indeed dozens of options to get between them, so suspect JNB-LHR likewise is not the gold mine they wish for.

VS also dropped CPT-LHR a while back, so I wonder how is BA doing on the route?

Regarding JNB-LHR, if BA are doing double daily on a 380 (in winter/southern summer), plus VS daily on a 789, the route can't be bleeding that much to the ME3 and must still be quite lucrative, no? Or are BA and VS soft too?

I think this route has always been a winner for BA, it always has seemed to have done well since the BOAC days.

If it wasn't pulling its weight it would be at 1x daily 789/77E by now.

jfk777 wrote:

MARSHAL1 wrote:

It seems that they are just in the wrong alliance. They need to be in ONEWORLD for connectivity to Australia, UK, JFK, GRU,
& HKG and a codeshare with Comair of South Africa.

Star is definitely the wrong alliance for SAA, One World would help them out in all the English speaking markets they fly to. The UK, the USA, Hong Kong, Australia and Brazil are all OW strong holds.

The reduction of double daily service on the LHR route to once daily with an A330-300 will generate cash for SAA, leased LHR slots cost about 200,000 USD monthly.

COMAIR is the BA franchisee in South Africa, and as far as BA is concerned, it has its feeder service covered. COMAIR flies within South Africa, as well as Zambia, Namibia, Zimbabwe and Mauritius. It has also been profitable in the last three years.

Which slots is it keeping and which ones is it leasing out? And who's leasing it from SA? I think leasing out makes it smarter than what Kenya Airways did.

Interesting note, almost all of SA's aircraft are leased according to planespotters:

A319: 7 leased / 0 owned
A320: 10 leased / 0 owned
A332: 6 leased / 0 owned
A333: 5 leased / 0 owned
A343: 1 leased / 6 owned
A346: 3 leased / 6 owned
B738: 6 leased / 0 owned
B733: 3 leased / 0 owned

KarelXWB wrote:

skipness1E wrote:

Can the A330-300 get out of JNB with a decent payload to LHR? This was the whole reason they used A346/A343 and latterly A332? Not too long ago we had three B747s per day, two to JNB and one CPT.

Apparently SAA received the newest 242t A330-300 that can lift a bit more out of JNB.

Based on Airbus ACAP docs, it should be able to lift close to 240t if it uses the 14,000 ft runway. The other runway is shorter (11,000 ft) and would limit the aircraft at 230t.

Would tire speed come into play here? It was the limiting factor for the 77L performance at ADD last time I looked at the charts.

MARSHAL1 wrote:

It seems that they are just in the wrong alliance. They need to be in ONEWORLD for connectivity to Australia, UK, JFK, GRU,
& HKG and a codeshare with Comair of South Africa.

Spending 8-9 digits USD to switch alliances when they're already in dire financial situation is never a smart thing to do.

berari wrote:

Which slots is it keeping and which ones is it leasing out? And who's leasing it from SA? I think leasing out makes it smarter than what Kenya Airways did.

In KQ's case I actually believe their LHR slot was sold and they leased a pair from AF/KL.

Michael

this will be a big hit on the cargo side, their 2 flights are generally permanently busy year round, although on such a long route I presume they don't get many PMCs on there

There is no reason for SAA to loose money on this route. A few years back, Nationwide Airlines operated it's only intercontinental service on this route with a 767. If it's so un-profitable, why would private airlines bother?

mh330fc wrote:

There is no reason for SAA to loose money on this route. A few years back, Nationwide Airlines operated it's only intercontinental service on this route with a 767. If it's so un-profitable, why would private airlines bother?

And what happened to Nationwide?

South Africa from the UK always seams a bit of a strange market.

It used to be (might still) that LHR-JNB was a good market for BA mainly with business passengers. If thats the case why does SA not do better on the route.

Cape Town used to be (might still be) more of a leisure destination and BA currently have double daily from LHR and a few flights a week from LGW. So thats a lot of seats. But VS and SA both dropped the route.

alan3 wrote:

LAXintl wrote:

VS also dropped CPT-LHR a while back, so I wonder how is BA doing on the route?

Regarding JNB-LHR, if BA are doing double daily on a 380 (in winter/southern summer), plus VS daily on a 789, the route can't be bleeding that much to the ME3 and must still be quite lucrative, no? Or are BA and VS soft too?

BA are 4 daily to CPT some days this winter (3x744 @ LHR, 1x772 @ LGW), so I assume they're printing money on this route. I'm surprised that VS dropped CPT-LHR, given they also have feed from the USA. Maybe BA is just filling up with pax connecting from around Europe? It's a shame to see SAA cutting back so much given European/Asian airlines are making so much money going into SA.

The whole point is that SAA is controlled and run by the SA government who appoints the board and many members of senior management. It is not run on a normal commercial basis.
Many good managers left because of government political interference and those that remain are frustrated. SAA has always had government interference, the trouble is that now it is worse and the airline's competitive environment is much more competitive. BA have the advantage of feeding traffic from many destinations to SA thru London. Previously SAA had a better reputation and managed to be competitive on the SA UK route but many things have changed. The big other change has been the arrival of EK who now have 7 flights a day from SA. Just remember what EK did to QF which was a much better managed and financed airline. QF had to basically throw the towel in and join forces with EK on the Aust Europe route. Well SAA came to the same conclusion and a deal was nearly stuck until guess what? Yes, a government official stepped in and tried to make their own deal with EY. This, of course, fell apart and EK walked away together with the non-government appointed SAA CEO. This is how things work in Africa, I don't think from the comments I have read that many people realise this. They make comments and come to conclusions based on how things work in non-corrupt countries with commercial airlines.
This sadly is not the way things are with SAA, at least this time they have decided to lease out the LHR slot rather than selling it as they did when they cancelled the CPT flight. They have at least one asset which will keep it's value.

If it is true that SAA lease almost all of their aircraft, the LHR slots are going to be quite high up on SAA's asset list.

mh330fc wrote:

There is no reason for SAA to loose money on this route. A few years back, Nationwide Airlines operated it's only intercontinental service on this route with a 767. If it's so un-profitable, why would private airlines bother?

Nationwide is no longer operating to LON, is it? Or is it even in business? It likely tried it due to prestige, or it could have also contributed to its demise. Nationwide ceased operations in 2008 according to Wikipedia. In the last ten years, the competition into South Africa has ballooned with the likes of EK and TK. Current times are different.

They are doing the following:
- Going from operating two A332 flights to one A333 flight
- Going from 72 premium and 372 economy to 46 premium and 206 economy seats
- Leasing out (not losing) its second but very valuable slot, which is a temporary measure but generates money

They are restructuring and taking the right steps to survive. This may allow them to get rid of some aircraft, which further reduces costs. It's worth noting that most of their feed via Star Alliance would come via FRA and MUC which they are maintaining, albeit with A332s.

richcandy wrote:

South Africa from the UK always seams a bit of a strange market.

It used to be (might still) that LHR-JNB was a good market for BA mainly with business passengers. If thats the case why does SA not do better on the route.

Cape Town used to be (might still be) more of a leisure destination and BA currently have double daily from LHR and a few flights a week from LGW. So thats a lot of seats. But VS and SA both dropped the route.

Clearly BA has the advantage of not beinga strong brand in the UK, but also having the ability for onward connections. SA can only focus on O&D and the limited southern African connecting traffic which has eroded through competition.

I don't know what's going on in CPT lately, but everybody's going there.

cv990Coronado wrote:

The whole point is that SAA is controlled and run by the SA government who appoints the board and many members of senior management. It is not run on a normal commercial basis.
Many good managers left because of government political interference and those that remain are frustrated. SAA has always had government interference, the trouble is that now it is worse and the airline's competitive environment is much more competitive. BA have the advantage of feeding traffic from many destinations to SA thru London. Previously SAA had a better reputation and managed to be competitive on the SA UK route but many things have changed. The big other change has been the arrival of EK who now have 7 flights a day from SA. Just remember what EK did to QF which was a much better managed and financed airline. QF had to basically throw the towel in and join forces with EK on the Aust Europe route. Well SAA came to the same conclusion and a deal was nearly stuck until guess what? Yes, a government official stepped in and tried to make their own deal with EY. This, of course, fell apart and EK walked away together with the non-government appointed SAA CEO. This is how things work in Africa, I don't think from the comments I have read that many people realise this. They make comments and come to conclusions based on how things work in non-corrupt countries with commercial airlines.
This sadly is not the way things are with SAA, at least this time they have decided to lease out the LHR slot rather than selling it as they did when they cancelled the CPT flight. They have at least one asset which will keep it's value.

While I agree with mismanagement being a big part of this (how many CEOs did they have in last decade,) it was also exacerbated by the competition that kept coming in. The South African government simply kept the doors wide open for the likes of EK to waltz through. I'm not a proponent of protectionism, but for an African government, they did something wrong there!

I think SAA has two things going against it to LHR with 2 daily flights.
First, the flights run almost parallel, one departs at 2100 and the other at 2155. What is the point of that? Wouldn't it make more sense to have one departure at 2100 and the other at 2330? If they can't fill two flights with one at 2100 and other other at 2155 then surely one flight at 2100 makes more sense.
I have also heard that the majority of traffic originates on the UK side,which makes it more difficult for SAA.

Well, SA is dependent on local South African traffic as well as the Southern African region. South Africa hasn't been doing that great lately (the country's 2nd largest city is literally running out of water) , and Southern Africa has seen the introduction of services from the ME3 + TK plus ET now runs multiple daily flights on WB's thought the region.

Anyone know how their market share is on JNB O/D ?

A laundry list of screw ups by various "leaders" and "stakeholders" at SAA since the 90's has driven it into the ground. As has been well documented, various politicians' children now have villas in Dubai so it should come as no surprise that EK and its imitators have flung the barn doors wide open. Interestingly EK prices have now crept up but there are oodles of cheap one stop options that have crippled SA.

JNB-LHR one way on May 23rd tells an interesting story:
- SA has the most expensive direct service by almost C$150 over BA. VS offers the cheapest.
- In all there were 39 cheaper options. The cheapest was C$482 vs C$1,155 and only 4 hours longer via NBO.

YOWza

berari wrote:

Clearly BA has the advantage of not being a strong brand in the UK, but also having the ability for onward connections.

Can you explain how 'not being a strong brand' is an advantage?

One change that happened was BMI merged with BA and all Star alliance airlines at LHR lost their feed including SAA. SAA could move their London flights to Gatwick ans make a deal with Ryannair for feed like Norwegian and other LGW airline have. They could lease out or sell their existing LHR slots which being early in the morning are worth lots, I would guess $150,000,000.00 USD(one hundred fifty million dollars).

I don't think this is really about their London route. SAA is deep in the shit, both on the cost side, but also on the revenue side with the damage to the brand over a number of years. Most, if not all, long haul routes are making loses and they're dramatically cutting capacity to reduce loses while they restructure. If the restructuring works and they manage to reduce the cost structure and improve revenue flows. In that respect, reducing a frequency to London makes the most sense since it's the one with the highest costs, least connections, but importantly can actually generate while revenue by leasing the slot which will help cash flow. If they're actually able to turn things around they'll be able to take the slots back.

London in particular has been a confluence of bad things for SAA in the last decade or so. They lost the BMI connections, which was critical, but also have been hurt by ME3+T as well as both BA and VS JV traffic. I don't think we can discount just how JV traffic has assisted BA and VS build JNB.

Others might be able to answer better, but it was striking that SAA was a long time operator into the old Terminal 1 at LHR, which would have made connections onto BD very convenient. With three 747s coming in most days in the late 1990s (two from JNB, one from CPT) that was not an insignificant amount of capacity.

I also think they must have been quite strong because it was telling that when BA had the dual hub strategy in the late 1990s and shifted its South American and African flying to LGW it was the South African flights that stayed at LHR. Heck, they even kept the Gaborone and Durban tags with the 744 from JNB rather than launch a LGW-GBE-DUR flight. Equally, when BA shifted some longhaul/shorthaul flying around prior to the T5 consolidation it moved the South African flights to T1, which would suggest that BA wanted to make connections simpler (given that T1 remained predominantly shorthaul).

The Comair/BA relationship (twenty years strong) will also be a factor I suspect. It's not just that Comair gives BA feed at JNB/CPT (and other oneworld carriers) but the relatively strong Southern African network that Comair has means that there will be a not insignificant frequent flyer base (Avios) that will look at using BA not only to LHR but for onward connections. I don't think it is any coincidence that when the BA franchise model starting dropping away in the 2000s Comair has remained one of only two partners using the model with BA (Why Sun-Air of Scandinavia is the other I have yet to fathom given the low level of integration with the rest of BA!).

So SA has competition on SA-UK traffic with indirect routes (ME3 and other African/Euro carriers) but more significantly on the direct route to London its main competitor has feed at both ends whereas SA only has feed at the home country end.

Someone else mentioned whether a move to LGW would be good for SA. It would be interesting to know if it had been considered. With only one daily flight, pretty much O&D to London, it could be an interesting move if marketed correctly (e.g. offer your business class passengers free onward First Class rail travel to London). I'm sure LGW would try and cut SA a good deal if appropriate slots could be found and those LHR slots would be a good earner even if both sets were leased out rather than sold (allowing a potential LHR return in future).

FlyCaledonian wrote:

Someone else mentioned whether a move to LGW would be good for SA. It would be interesting to know if it had been considered. With only one daily flight, pretty much O&D to London, it could be an interesting move if marketed correctly (e.g. offer your business class passengers free onward First Class rail travel to London). I'm sure LGW would try and cut SA a good deal if appropriate slots could be found and those LHR slots would be a good earner even if both sets were leased out rather than sold (allowing a potential LHR return in future).

I wonder how many of the government appointed managers/directors of SAA have property in the west end of London! They will probably keep LHR for some sort of prestige, profit or no profit!

jfk777 wrote:

One change that happened was BMI merged with BA and all Star alliance airlines at LHR lost their feed including SAA. SAA could move their London flights to Gatwick ans make a deal with Ryannair for feed like Norwegian and other LGW airline have. They could lease out or sell their existing LHR slots which being early in the morning are worth lots, I would guess $150,000,000.00 USD(one hundred fifty million dollars).

With regards to Ryanair they only fly to five destinations from LGW and Norwegian have recently cut back on their short haul network from the airport although their Scandinavian connections from LGW remain the same.

I very much doubt that SAA would make a 'deal' with either Norwegian or Ryanair if a transfer of the single daily flight to LGW was ever considered as it would rely more or less on O&D.