Looking beyond the crisis
South African Airways is set to return to the skies later in September 2021, with its airfreight division expected to play a pivotal role in the provision of air cargo solutions in South Africa and the region. ITJ correspondent Thola Nzuza looks at the hopes associated with the new start for the airline, after the business rescue proceedings were completed.
The pictures from countries in lockdown due to the outbreak of Covid-19 were similar from around the world. All over the planet the pandemic resulted in the same news – airfreight capacities shrank and simultaneously drove margins up, presenting an opportunity for those cargo airlines that played an instrumental role in facilitating the movement of life-saving goods.
The national carrier South African Airways (SAA), which was classified as an essential service during the national lockdown, was able to act swiftly and offer charter services for repatriation flights and cargo transportation. SAA’s airfreight division, South African Airways Cargo (SAA Cargo), ramped up capacities to assist the freight forwarding industry. Thomas Kgokolo, interim chief executive officer of SAA, commented that “as an organisation we were very pleased to assist the country and its business activities when it mattered most, enabling many to deal with the challenges presented by Covid-19.”
P4F took off in April 2020
Through its airfreight division the airline deployed its Airbus A340-600s to provide services to sustain supply chains to and from various countries. On 6 April 2020 SAA Cargo operated a historic flight, chartering a passenger aeroplane to carry cargo only between Johannesburg and Frankfurt (see also ITJ Daily of 15 April 2020). Thereafter the division deployed more passenger aircraft to operate a total of 38 cargo-only flights (known as P4F in SAA).
The flights included rendering services for the South African National Defence Force and for the Solidarity Fund, a not-for-profit organisation established to provide much needed PPE for frontline health workers. Looking at the highlights of these activities, Kgokolo proudly pointed out that “P4F operations, which we pursued relentlessly, were a key milestone in the history of our airline. Their success can also be attributed to the great teamwork exhibited by every SAA department.” The airline’s own charter services were augmented by purchasing cargo capacities on strategic third-party airlines, especially those flying between Europe and South Africa.
From April 2020 on SAA Cargo lifted more than 1,000 t of urgently-needed medical supplies on chartered and P4F flights. Cargo transportation during the lockdown thus resulted in significant revenue generation when SAA needed it the most.
The airline also faced numerous challenges from new Covid-19 regulations for air cargo services. In addition, it had to run its business with significant staffing reductions, fewer aircraft and cross-border restrictions. “To address the challenges we collaborated with many key players in the value chain. In spite of these hurdles, the industry emerged with many positives.” Kgokolo added.
SAA Cargo has a solid customer base
The relaunch of South African Airways, which exited the rescue process on 30 April 2021, comes at an opportune time, now that aviation activities have slowly picked up again since the end of 2020.
The transport and logistics industry is keenly awaiting SAA’s resumption of operations, and is eager to see the role the airfreight division SAA Cargo is likely to play. For many years, the cargo division was a key contributor to the economy, facilitating domestic, intra-Africa and inter-continental trade activities through its air cargo transportation services.
The airfreight division has a very solid customer base; it has remained loyal to the carrier for decades, due to its reliable services and its strong market network. The airline underlined the fact that it will continue to provide an integrated global distribution network and terminal services for the purposes of air cargo’s transport and logistics requirements. Talking to the ITJ, Kgokolo also emphasised the fact that “SAA Cargo will remain an integral part of the newly-restructured SAA Group.”
To succeed, it must rethink its business model to adapt to new market dynamics, the ever-evolving business environment, stiff competition from other airlines and the challenges presented by Covid-19.
Market presence maintained
The carrier’s airfreight business, which used to enjoy a strong global presence, took severe hits in the course of the rescue process. An analysis of the past few months puts Kgokolo in an optimistic mood, however. “SAA Cargo operations maintained their market presence during the Covid-19 downturn, when many sectors and businesses had to close down or restructure their role in the economy.” The cargo business is now set to focus on strategic SAA passenger routes, supplemented by partnerships with third parties.
In any case, SAA Cargo’s resumption of airfreight operations will provide the industry with much-needed cargo capacities in Africa. The business provides great prospects, as there are stock shortages both in the country and the region. Additionally, the region also faces high demand for medical supplies, including vaccines.