South African Airways (SAA’s) decision to lease the 2016 Airbus A330-300 and acquire new aircraft suggests the airline’s resolve to recapture its position in the domestic airline market and modernise its fleet.
The Aircraft Engine Lease Finance Inc. (AELF) recently confirmed the wet lease of the Airbus on behalf of SAA.
A wet lease is an aviation agreement between an aircraft owner and a lessee where an aircraft, flight crew, insurance, and maintenance are loaned. The lessee pays back the owner according to the flight hours clocked.
According to SAA’s CEO, John Lamola, this milestone acquisition strengthened ties between AELF and the airline. He indicated that such a partnership was significant to SAA’s expansion plans.
SAA was reported to have purchased five new Airbus A330-300s this year. One of the planes is in the airline’s possession, while the rest’s set for delivery later in the year.
When upgrading a fleet of planes, seating is key. The Airbus A330-300 boasts a capacity to seat 249 passengers. The design accommodates 203 economy seats and 46 business class passengers.
Aviation expert, Addison Schonland, has been critical of SAA’s seating configuration, claiming it’s not in sync with domestic market needs.
SAA’s Airbus A320s accommodate 138 passengers in economy and business classes compared to its US counterparts. Delta has the capacity to transport 157 passengers, and United Airlines has 150.
In a market where pricing and value for money prevail, SAA’s airplanes do not enable optimal use of cabin spaces, yet costs remain high.
Its seating limitations have seen SAA losing the 90% market share it enjoyed decades ago.
Another challenge for SAA is the slow pace of fleet expansion. This has limited its capacity within the domestic market.
New board for airline
A key development for SAA is the South African Cabinet’s appointment of a new board of directors. Chairperson, Sedzani Mudau, and Deputy Chair, Fathima Gany, have been handed the reins on the premise that they must deliver on stabilising operations and strengthening governance.
Transport Minister, Barbara Creecy, was reported to have said: “The board’s mandate is to leverage SAA’s debt-free balance sheet and liquidity to scale the fleet from 20 to over 55 aircraft by 2030—using a capital-raising strategy that avoids sovereign guarantees.”
Do you believe SAA will succeed in winning market share?
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