South African Airways Trying To Sell A340s

Filed Under: South African Airways

South African Airways has been losing money for years, though the severity of the situation increased a few weeks ago, when the company entered “business rescue.”

With this, every aspect of the company is supposed to be evaluated.

South African Airways’ inefficient fleet

South African Airways has a countless number of problems, not the least of which is that they have an inefficient fleet and an inefficient route network:

  • The backbone of South African Airways’ long haul fleet is their A340s, which are not fuel efficient
  • The airline loses money on most of their long haul routes for a variety of reasons, not the least of which is that their aircraft utilization is terrible, as planes sit on the ground at outstations for entire days in some cases

The airline did recently start leasing some A350-900s, which were planes that HNA Group (the parent company of Hainan) couldn’t pay for. The plan was for these A350s to start flying between Johannesburg and New York as of December 2019, though as of now these planes are just operating short haul flights.

While I understand that acquiring A350s the same time the company enters business rescue probably wasn’t smart in retrospect, having these and not using them efficiently also doesn’t seem ideal.

If the airline is going to succeed long term they need a more efficient and competitive fleet, though I understand that getting the funding for such a refresh is challenging.

South African Airways trying to sell A340s

As reported by Simple Flying, South African Airways has put nine of their 16 A340 aircraft on sale, including four A340-600s and five A340-300s. Along with that they’ve put spare engines and auxiliary power units for the planes on sale.

This is per a tender that was issued on January 10, 2020, inviting parties to bid by January 30, 2020.

The planes up for sale are anywhere between 14 and 22 years old, and most of them are still in operation.

Why the airline is unlikely to succeed with this

If South African Airways is looking to radically restructure, then getting rid of these A340s is the right move. In the event that they do in fact get offers for all nine of these planes, the airline would significantly have to cut long haul capacity, as four A350s don’t offer sufficient capacity to replace nine A340s.

Furthermore, keep in mind the A350s are just on short term lease. Even so, that type of discipline might be good for the airline.

The bigger issue, though, is that the odds of SAA being successful here are minimal. The market for old A340-300s and A340-600s is almost non-existent.

The only companies that have really picked up any of these in recent years are Portuguese leasing company Hi Fly and Air Belgium. This simply isn’t what most airlines are looking for nowadays.

Bottom line

If South African Airways wants to radically change things, then selling their A340s and maybe even cutting many of their long haul routes is the right path forward.

The problem is that this attempt to sell A340s seems highly unlikely to succeed. There simply isn’t a huge market out there for used A340s, so I’d be surprised if they have any takers.

Regardless, one has to wonder what exactly they’re doing with their A350s right now. The planes are already in their fleet, yet they’re using them for short domestic flights, rather than for their New York route, where the benefits would be most significant.

As I’ve said in the past, if profitability is the priority for South African Airways, it seems they’d be much better off focusing on regional routes and partnering more closely with a major global airline, perhaps even a Gulf carrier.

That would offer them much better global connectivity in a more efficient way. But I get there’s also “pride” in having a global national airline, which is likely the reason the airline is still alive to begin with…

What do you make of SAA’s plans to sell their A340s?

Comments
  1. I don’t think a 350 can takeoff from JNB with enough fuel to make it to North America. Adding a stop on their JFK route will probably kill it so it’ll be really interesting to see what happens to JFK and other ULH routes if they do sell their 340 fleet

  2. Someone who wants to run flights over Antarctica, connecting major southern cities, should look into it. Pretty much the one place left where you need your 4 engines

  3. I believe you wrote an article about SA ‘fast tracking’ their pilots through training for the 350. Maybe this is their attempt for the pilots to obtain on-the-job training and used to the plane with short routes before putting them on longer routes. The airline is already financially strapped. If there is the suggestion that they are fast tracking, they immediately put the 350 on a longhaul, and something goes wrong, that would be the end of SA. It may be a logical step-by-step process. Concerning selling the 340s…nope, explain that one.

  4. You are correct. There is literally no market for used A340s. It would be acquiring a liability. SAA will have to pay someone to take these or else pay to retire them. Either way, they’re not making any money off the sale.

  5. They also need to sort out their shorthaul fleet too. 120 and 138 seats on A319s and A320s is far from optimal. They already have a LCC that could exclusively operate short haul for them, allowing SAA to focus solely on long haul wide body ops.

  6. I sell flight’s tickets as job… Never seen competitive fares sold by SAA.. One of the most expensive airline out there, and they don’t even offer an excellent service… Not surprised they are in troubles. Plus as You said they don’t even know how to properly use the little resources they have, so… screws them!

  7. Ben, a little more research on the current usage of the A350 in SAA’s fleet won’t go amiss. I was on one of the A350’s two days ago, on a flight from Cape Town to Johannesburg. I chatted to an off duty pilot on the bus, it was his first flight on the A350 as he flies the A330 and A340 for SAA. The A350 is currently utilized on the CPT – JNB – CPT route for crew training purposes. As you must be well aware of by now that is standard practice when a new type is introduced to a fleet. The one we were on was one of two that operated with a Chinese airline for a few months before going to SAA. The other two are new and were destined for Air Mauritius. The A350 will be on JNB – NYC – JNB route within the next week or two.

    @ Demetrius – those white A340’s belong to Global Airlines, they are all white as they are wet-leased to other carriers when they need them.

    @Mark – the JNB – NYC flight will be non-stop. The flight is well within the capability of the aircraft which is why it was chosen.

    @Nick – Google is your friend re the A350 ETOPS.

    According to the off-duty pilot all CAA clearances for the routing to NYC have been obtained hence the imminent deployment of the A350 on that route.

  8. @Mark – Echoing what Chris already said – SAA wouldn’t have acquired the A350 if it couldn’t do JNB-JFK non-stop.

  9. @AW

    There is market for A340, but it’s mostly for spare parts. Essentially you pay whatever the engines are worth and get the plane for free.

    Engines of course being the biggest spare parts cost out there.

  10. @James: Southern flights don’t go over Antarctica. Basically, southern cities are farther away from the South Pole than northern cities are close to the North Pole. So straight line flights between those cities don’t fully go polar.

  11. SAA is a train wreck. It’s been run by political appointees who are put there to loot the company for the ANC. The planes are dilapidated. SAA ticket prices are higher than others. You can make book on this. These planes will be sold to some recently formed company that will take possession and never pay off the remaining balance, and that new company will in turn fire sale them at 50% value and the money will be pocketed by a band of ANC insiders.

  12. Oh dear.I`ve booked two tickets(for me and the mate,going on a hunting trip)for mid May of this year from Adelaide to East London South Africa on SAA.Should I be worried that they might go bust between now and May?

  13. @ James S : LA used to have to stop in AKL for their SCL SYD flight with the 343. Once they switched to the 789 they can do it nonstop.
    Rots of ruck trying to sell those unreliable, expensive, fuel guzzling pigs. Airbus 4 engine types are not exactly stellar performers (wither 388?)

  14. Can’t they be stripped for parts? Is there too few parts in an A340 that’s transferable to say the A330neo or even A350 to make it profitable?

  15. Maybe it is nostalgia but I love the A340. Seeing those 4 engines reminds me of the 707 days. I get they are horribly inefficient but I think that plane is gorgeous. In the SA livery it is stunning.

    I love the A350 so like the upgrade but am still sad to see the A340 go.

    The times are a changin’.

    Wish I had a place to put one and could afford it. Would be cool to own one.

  16. @Jimmy – well said, I couldn’t agree with you more! For me the A340-600 is the most beautiful and elegant aircraft ever built. I live in Cape Town but work in Johannesburg and for years I booked most of my flights on the A340-600 or the A340-300. I made a point of doing this as I knew they wouldn’t be around much longer. Both are a joy to fly on, they are so quiet and comfortable and the 2 + 4 + 2 configuration in Economy class is great. I know they are less efficient than the big twins but as a passenger I love them. The off-duty pilot I spoke to mostly flies the 600 and he speaks of it as if it is his child, he just loves it. It is an excellent hot and high aircraft, he told me they take off from Johannesburg fully laden on a hot day for the nonstop flight to JFK using only around 90% of thrust. He said it is absolute joy to pilot. Sad times indeed to see them go but at least they still have the A330 and now the A350 for these domestic flights so I guess we have something to be grateful for. Hope SAA survives so I can continue traveling on the wide bodies domestically. Most of the passengers on these flights are foreigners connecting from JNB – CPT or CPT – JNB so the big birds have a role to play. At the moment SAA also use the A319 and A320 on this route and they are great but I have a feeling they are going to cull them as well and fly domestically using their LCC instead. Then it is back to the 737-800 which is atrocious compared to the small Airbii.

  17. SAA actually acquired 6 A330-200 and 5 A330-300 by leasing in 2018. Lufthansa is also sitting with too many A340s that nobody wants

  18. @ Chris – Do you think SAA will survive this year as I need an upcoming flight CPT – JNB to be booked for later this year as part of a Delta itinerary ?

  19. As usual, a little more research before posting might be nice.

    As pointed out above, new fleet types are always flown short haul during pilot training. Even AF flew the A380 between LHR and CDG at first. BA operating A350 LHR MAD and so on. So before you go into route planning for SAA, might want to consider the why behind a decision.

    Similarly, suggesting they don’t make money because their planes sit all day is equally naive. This is common on most north south long haul routes. Look at GRU GIG SCL or EZE and you will see loads of DL AA and UA aircraft sitting in the sun all day. Just like you see AR and LA at JFK/MIA or BA/AF at JNB etc. The demand is for overnight red eye flights so they sit during the day. (Yes there are a few day time operations here and there but they are notoriously fickle on profitability)

  20. Just adding to the ‘short haul first for new long haul material’: Norwegian operated European flights with their DreamLiners first… if they actually flew, of course. XD
    So CPH-AGP on a DreamLiner, for example.

    More off-topic: Currently they have a shortage of aircraft due to the 73M crisis, resulting in EuroAtlantic operating routes like OSL-CDG with B767 aircraft. 🙂

    On topic: SAA can just forget selling those. It doesn’t happen very often that a company like AirBelgium (why are they even still around?) gets started. Maybe it’s just easiest to scrap them directly, take your losses and get on with it. Focus on the future, make some tough decisions and just get it done.
    On a personal note: it would be a pity to see the A340-family go in general, as I also have fond memories of the A346. I found my first error fare for a flight with this type and it was to a place that was, at the time, quite out of my comfort zone. So those were good memories. 🙂

  21. @Genise – no one knows at this point what the end result of the business rescue process will be. If I was you I’d book the SAA flights as part of your Delta itinerary. Should SAA go under or decide to stop flying domestically they will in all likelihood rebook you on their LCC, Mango Airlines. If that doesn’t work out the worst that can happen is that you may be forced to buy new tickets for the domestic flight/s. It is a busy route with lots of competition and the fares are low. They start from around $50 one way, $100 return.

  22. My comment a bit old for this thread…but I used to work for a UK airline that used to paint “4 Engine 4 Long-Haul” on the side of their 340’s. And this when the 777’s were easily dominating. Ohhh, the marketing department peeps…just too clever…

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