South Africa Airways Is Eyeing Commercial Deals, Not Investment

(Bloomberg) -- South African Airways held talks with global carriers including Emirates about strengthening commercial relationships and taking on excess cabin crew, though stopped short of asking for cash investments.

The loss-making state airline has been on a roadshow to meet code share and other potential partners to discuss ways they could assist with its revival effort, SAA said in an emailed statement Monday. SAA commented after Johannesburg-based newspaper City Press reported both Emirates and Etihad were in talks with SAA about a partnership, citing the U.A.E.’s ambassador to South Africa.

SAA is in the throes of a financial crisis that has led Chief Executive Officer Vuyani Jarana to call for an aviation-industry investor to help it return to profit and avoid further government bailouts. Gulf airlines have been muted as candidates, given their routes linking major African cities with Middle Eastern hubs and other Asian and European destinations.

Emirates and SAA are working closely to enhance their code-sharing agreement but there are no plans to invest, an Emirates spokesperson said in an emailed statement Monday. Etihad declined to comment.

Expensive Alliances

SAA has met Emirates, Turkish Airways, Qatar Airways, Kenya Airways, Air Mauritius, Unite Airlines and Singapore Airlines, the company said.

Etihad isn’t on that list, and any move by the Abu Dhabi-based airline to invest in SAA would reverse its policy to scale back a past strategy of sealing alliances through equity investments. Etihad CEO Tony Douglas is reigning in the carrier’s reach by cutting jobs, routes and working to freeze plane orders.

SAA and Etihad briefly had a code-sharing agreement, but it was scrapped when the South African carrier ended direct flights in 2016 between its home base in Johannesburg and Abu Dhabi.

Nigeria is competing with SAA for attention from Gulf carriers after announcing a new national airline at the Farnborough Air Show last week. Aviation Minister Hadi Sirika tweeted a picture of himself with Qatar Airways CEO Akbar Al-Baker, referring to airline boss as a potential partner or investor.

To contact the reporters on this story: John Bowker in Johannesburg at jbowker2@bloomberg.net;Layan Odeh in Dubai at lodeh3@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Tara Patel, John Bowker

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