Friday, September 27, 2013

■ SOUTH AFRICA: SA Express posts $65'000 profit for FY2012/13; plans fleet acquisition in 2H 2014.

SSA ExpressA Express (XZ) has reported a small net profit of ZAR650'000 (USD64'930) on the back of a 14% rise in revenue for its 2012/13 Financial Year, airline CEO Inati Ntshanga announced at the airline's AGM on Wednesday, September 25, in Johannesburg. Turnover also rose by ZAR270million, from ZARR2.021billion in 2012 to ZAR2.295billion in 2013.

SA Express route networt
SA Express' Network
Mr Ntshanga said despite a decline in passenger numbers, revenue was boosted mainly through fare increases and higher load factors. Overall, the profit generated, though small, was a significant improvement on the airline's 2011/12 Financial Year in which it posted a net ZAR368million loss.

Among measures taken to improve the company's cash flow, SAX applied a stringent cost-compression programme that resulted in the operating costs remaining constant for the year. As a result, cost savings for 2012/13 totalled ZAR129.1million, far exceeding the target of ZAR70million. Additionally, three Bombardier Q400s were sold for ZAR30million.

Speaking after the AGM, South African Minister for public Enterprises, Malusi Gigaba said the airline had achieved 64.7% of its agreed target,s compared to 41% achieved in the 2011/12 financial year, and he expected the airline to improve on this performance in the 2013/14 financial year and insists that the airline, the regional and domestic feeder arm of South African Airways (SA), " remains aligned with the Group's Long Term Turnaround Strategy (LTTS) with operational alignment to be a critical yardstick in measuring the performance of the company from here on."

Earlier this month, Mr Gigaba presented SAA's LTTS to a parliamentary committee which envisages the creation of an integrated airline group, SAA Group Holdings, incorporating SAA, LCC Mango (JE) and SA Express under a single holding company structure to improve asset utilisation, operational efficiency and capital allocation. SA Express is also gearing itself for growth in accordance with the LTTS. With the approved 15 year fleet strategy, SA Express is expected to update its fleet in the second half of 2014 with next generation aircraft that will offer a comprehensive route network and improve on operational costs.

Among the airline's future plans are a hurried and decisive expansion into Africa, both in terms of Cargo and Passenger services, to curb the impact of the MENA (Middle East and North Africa) airlines, seen as a significant threat.
"The SAX is a key strategic domestic and regional feeder airline, which promotes Government foreign policy priorities of linking African countries to each other and promoting intra-Africa trade.

Although the Middle-East airlines are setting up hubs within the African continent, SAX is therefore required to act swiftly and decisively to have the first-mover advantage in these strategic markets,
"  the Minister said.
The full accounts were not distributed as they are yet to be presented to Parliament.