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Abu Dhabi, UAEFriday 17 August 2018

Emirates says no plans for South African Airways stake purchase

Local newspaper reported SAA was in talks with Emirates and Etihad for partnership

Emirates, Dubai's flag carrier, said it has no plans to invest in struggling state-owned airline South African Airways, following a report in South African media. Adam Schreck / AP
Emirates, Dubai's flag carrier, said it has no plans to invest in struggling state-owned airline South African Airways, following a report in South African media. Adam Schreck / AP

Dubai-based Emirates said it has no plans to invest in struggling carrier South African Airways, with which it has a codeshare arrangement, following reports that the carrier had held discussions with two UAE airlines over a potential deal.

“We are committed to the South African market and have enjoyed close co-operation with SAA since 1997, and we are working closely to further enhance our codeshare,” an Emirates spokeswoman told The National in a statement on Monday.

“However, we have no plans to invest or take any equity share in SAA or any other airline." Emirates “continues to focus on its organic growth and strategic codeshare partnerships where it makes sense for business and customers", she added

A spokesman for Etihad Airways said the Abu Dhabi-based carrier “does not comment on rumour or speculation”.

Etihad and state-owned SAA had a code-sharing agreement but this was scrapped when the South African carrier ended direct flights between Johannesburg and Abu Dhabi in 2016.

South African newspaper City Press reported on Sunday that two UAE airlines had held talks with SAA about a partnership the airline said it needed in order to revive its business. SAA has not turned a profit since 2011.

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The talks were facilitated by the UAE’s embassy in Pretoria, the newspaper said, citing comments from the UAE ambassador to South Africa. Etihad had been holding separate negotiations with SAA, the report said.

SAA received a 10 billion rand (Dh2.7bn) government bailout last year to avoid a debt default and was reported in April to be seeking further state assistance to prop up its business. The South African treasury’s 2016/2017 annual report identified a total of 19.1bn rand of “government guarantees” made available to the airline to date.

Its chief executive Vuyani Jarana has said several times an aviation investor could be the solution to bring the airline back to growth - by injecting capital, sharing operational costs and improving customer service.

Emirates chairman Sheikh Ahmed bin Saeed Al Maktoum has often said the carrier has no plans to expand its business through equity stakes in other airlines.

Etihad’s group chief executive Tony Douglas told The National this month that while the airline intends to forge new codeshare partnerships with airlines as it continues its strategy towards sustainable growth, it will focus its efforts on expanding point-to-point services, rather than on seeking new equity investments.

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