A_P_2015_04

26 African Pilot April 2015

This situation was being addressed at every level within the business and there
would be retrenchments throughout the company over the coming months.

Bezuidenhout said: “In its role as fl ag carrier, SAA serves as an economic
enabler with direct and indirect benefi ts across a wide range of economic
activity as well the catalytic impact on both in and outbound tourism.” South
Africa’s geographic end of hemisphere position further emphasises the
need for such air services as well as key partnerships with other carriers to
maximise connectivity and optimise commercial opportunity. SAA connects
South Africa to its major trade and tourism partners, in so doing supporting
33,000 jobs in South Africa and contributing R10bn (US$ 900m), or
approximately 0.3%, to the country’s GDP every year. Approximately 40% of
all passengers and more than 50% of all air cargo within and to South Africa
last year was carried by the SAA Group or under the SAA code. No South
African airline trains more pilots and technicians, procures more from local
suppliers or has taken more steps to protect the environment than SAA.”

SAA REDUCES UNNECESSARY WEIGHT ON LONG HAUL FLIGHTS

In a further development on Tuesday 24 February, members of the media
were invited to participate in the testing of an initiative aimed at reducing
possible unnecessary weight on its long-haul fl ights. All items that add to
aircraft weight and the resultant fuel burn such as catering and other on
board items, including items in the cockpit, were closely scrutinised as the
items were removed from an A340-600 on landing from Munich, in a hangar
at SAAT, the maintenance facility of SAA. Bezuidenhout and members of the
executive team participated in the exercise, which was initiated by the fuel forum
of the airline’s cost compression programme. This forum has been tasked to save
fuel by, amongst other initiatives, coming up with innovative weight reductions of
items carried on board.

“Large quantities of returned on board product, or catering items will tell a

story. It will show us that our customers do not use these items. Reducing

weight is critical to fuel burn.

For every kilogramme of additional weight carried on board, means that the

aircraft burns approximately 270g additional fuel for a fl ight of this distance,”

said Bezuidenhout.The complete list of items loaded before departure will be

scrutinised such as food, drinks, cutlery, crockery, blankets, duvets, pillows,

magazines, items in the cockpit and others.

SAA started looking at creative ways of cost compression in 2012, which has

to date resulted in cost savings of R1.8 billion over three years. The airline,

which is suffering sustained fi nancial pressures, is set on continually fi nding

ways of reducing cost throughout the airline, without compromising quality of

product and service delivery. Cost compression remains a key driver of SAA’s

90 Day Action Plan with areas under scrutiny such as improving productivity,

ensuring effi cient governance and procurement processes, doing business

differently and driving down costs.

SAA will continue to look for ways to fi nd innovative ways such as this

one of today to make an impact on the airline’s bottom line results. Cost

compression needs to become a culture and be ingrained in the way every

single member of SAA’s staff thinks and works.

Bezuidenhout said “We have to keep focused and work even harder so that

we can combat competitive pressures from our competitors whose costs

are lower than ours,” The airline’s senior management committed to further

cost compression initiatives at a recent strategy workshop which set revised

CASK targets (Cost per available seat kilometre) to be incorporated into

SAA’s next fi nancial year’s budget (FY2015/16).