Thursday, February 14, 2013

► SOUTH AFRICA: SAA seeks to alter Airbus A320 deal to lease, not buy.

SAA logoSouth Africa's loss making parastatal, South African Airways (SA), is to renegotiate its deal with Airbus Industrie SAS signed 11 years ago for 20 Airbus A320s. The cash strapped national carrier is said to be looking to lease the aircraft, as opposed to buying them, thereby allowing SAA to recuperate pre-delivery payments it made to purchase the aircraft, bringing in some much needed liquidity into the struggling airline.

SAA A320 in old livery
SAA A320 in old livery (Photovalet)
As part of its long term plan to replace its then fleet of ageing Boeings, including 747s, 767s and 737s, over a period 8 to 9 years, SAA, in 2002, signed a USD3.5billion deal with Airbus for 6 wide-body long-haul A340-600 and 6 A340-300 aircraft with 11 single-isle A319-100s and 15 A320-200s (later increased to 20 with the order of 5 additional IAE powered A320s due for delivery from 2013).

According to BusinessDay Live, the release of the Airbus cash — and the ZAR1.5billion that SAA plans to raise through a two-year bond programme which will be backed by the ZAR5billion guarantee the government extended to the airline last year to ensure it could continue operating as a going concern — would normalise cash requirements "for a considerable period of time", SAA Chief financial officer Wolf Meyer said.

SAA has also applied to use its two-year, ZAR5billion guarantee from the South African government that was extended to it late last year to keep the carrier solvent.