Ethiopian Airlines offers operational aid to struggling South African Airways

Ethiopian Airlines have offered operational aid to rival South African Airways (SAA) which includes planes, pilots and maintenance.

The goodwill gesture that was announced by the CEO Tewolde GebreMariam, is however not enough for SAA.

South African Airways, the national carrier of Africa’s most industrialized nation, requires a cash injection of $600 million to get off the ground again. While the coronavirus pandemic has made things worse, the airline has been piling up losses in recent years.

Meanwhile, Ethiopian Airlines has shot up to become Africa’s most profitable airline within the same period. It also has flies to the most destinations of all African air carriers.

However, the Ethiopian Airlines CEO said that he was not interested in helping with debts and costs at SAA. “We don’t want to deal with the legacy issues — the debt, labor claims and so on because that is very difficult for us not only in terms of financial outlay but also in terms of managing the restructuring.

“We want to make it very easy for them to start the airline by providing airplanes, by providing expertise, pilots, technicians, leadership.”

South African Airways requires $600 million to pay ticket refunds and for severance packages for approximately 4,000 former workers.

While SAA has its own MRO arm – SAA Technical – the company operates as a separate business. Indeed, it suspended services to its parent airline in late September over unpaid bills, only reinstating them after payments were made.

Ethiopian’s own MRO facility is one of the biggest in Africa and provides services to various third parties as well as Ethiopian itself. While moving MRO to Addis Ababa wouldn’t be convenient to SAA, it could mean more competitively priced maintenance services than it can get at home.

Ethiopian Airlines’ offer of pilots and planes is the most significant component. Since it had to send back its four A350s, SAA is now stuck with a relatively old and inefficient fleet.

Particularly for its long-haul operations, the airline is now reliant on eight A340s, with an average age of almost 17 years.

A couple of efficient A350s or 787s for long-haul, as well as the pilots to fly them will come in handy.

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