After learning that the strike schedule would proceed, the airline decided to cancel the Perth and Sao Paulo routes, Khaya Buthelezi, senior manager of corporate relations for the airline, told Reuters.

“That’s the decision we took last night since we could not find partner airlines that we can transfer our customers to, it became clear that those two routes must be cancelled,” he said, as reported by Zawya.

Buthelezi further said that because the airline had prepared backup plans, there were no disruptions to domestic flights or routes throughout Africa early.

Buthelezi reported seeing some pilots picketing outside the SAA office at Johannesburg’s OR Tambo International Airport.

However, South African Airways managed to ensure the suspension of the pilots’ strike that commenced on December 7 early morning, by effecting an agreement post the “productive discussions” between SAA’s Executive Management and the South African Airways Pilots Association (SAAPA).

As part of the resolution, management has agreed to a further 1% salary increase, bringing the total salary increase for SAA pilots to 9.47%.

Speaking to public news broadcaster SABC, SAA pilot Sibusiso Nxumalo, speaking on behalf of the National Transport Movement Pilots Forum and the SAA Pilots Association (SAAPA), stated that their demands went beyond money and focused on improved working conditions and employment conditions.

“The company has made a profit in the past couple of months. It’s not like we want a piece of that pie, we just want to have better working conditions,” Nxumalo said.

In a statement released by SAA, it was noted that the initial demand made by SAAPA in May 2024 for a 30% increase in pilot salaries was later reduced to 15%, along with related benefits.

According to a statement from SAA’s acting CEO, John Lamola, the company’s decline into bankruptcy would be triggered by the demand for a 15% pay increase.

An 8%–46% pay raise retroactive to April has been offered by the airline. Before the national carrier filed for bankruptcy protection in 2019, it was about to be liquidated.

Meanwhile, the first net profit reported by South African Airways in more than ten years marks a significant turning point in the airline’s recovery.

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The trade growth between Africa and Asia was noticeably slower, from 18.5% in April to 11% in May. However, capacity increased 9.2% over the previous year in May.

“Trading conditions for air cargo continue to be challenging with a 5.2% fall in demand and several economic indicators pointing towards weakness,” said IATA Director General Willie Walsh, Zawya reported.

“The second half of the year, however, should bring some improvements. As inflation moderates in many markets, it is widely expected that central bank rate hikes will taper. This should help stimulate economic activity with a positive impact on demand for air cargo,” he stated.

Global demand in May 2023 fell by 5.2% y-o-y, while capacity increased by 14.5% y-o-y, mainly due to belly capacity, which is increasing as passenger demand recovers.

According to IATA, capacity is currently 5.9% above May 2019 (pre-pandemic) levels.

Meanwhile, South African Airways (SAA) has confirmed the forthcoming launch of two new intercontinental routes to Sao Paulo, Brazil.

The transatlantic route is the first of its kind since South Africa’s flagship airline resumed normal operations in September 2021.

South African Airways interim executive chairman and chief executive officer John Lamola said he was pleased to announce Sao Paulo as the first international destination as the airline successfully weathered the crisis it found itself in during COVID-19.

“Our decision to resume long-haul service to Sao Paulo was made on the basis of a thorough analysis of the feasibility of this route,” he explained, TV Brics reported.

According to the company, South African Airways will fly to Sao Paulo Guarulhos International Airport four times a week, twice from Cape Town (on Tuesdays and Saturdays) and twice from Johannesburg (on Mondays and Thursdays).

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Through this partnership, MailAmericas will contribute its market expertise and the knowledge it has gained in the regions of Latin America and Africa, where it has networks in over 40 countries. At the same time, Ethiopian Airlines will offer air transport service for carrying goods across its extensive network.

CEO of Ethiopian Group Mesfin Tasew stated, “We are pleased to collaborate with MailAmericas in the launch of eCommerce logistics services across Africa and Latin America as the premier air cargo service provider in Africa. Together, we have provided services to more than 20 nations in Africa and Latin America thus far, and we are eager to continue extending our reach. In addition, we can better serve our clients through cooperation by utilizing MailAmericas’ knowledge, bilateral agreements, and private networks.”

According to Tomas Miguens, President of MailAmericas, “We are happy to tie up with Ethiopian Airlines Group and expand our horizon into Africa’s area. As one of the major service providers of Cross Border E-Commerce in Latin America and has served the area for over 25 years, our subsidiary Mailafrica has given us substantial expertise. It gives us great pleasure to collaborate with the top airline in Africa. Every consumer will benefit from a better shopping experience thanks to faster delivery and better package tracking. To continue our profitable engagement with Ethiopian Airlines Group, we will constantly try to expand it and create new ventures.”

Ethiopian Airlines will be given access to all bilateral agreements and private networks of MailAmericas through the cooperation, allowing it to provide consumers in Africa, Latin America, Europe, the Middle East, and other parts of the world with competitive services.

Ethiopia is constructing a 150,000-ton-per-year e-commerce hub in Addis Ababa to expand its e-commerce logistics capabilities and service. To enable the efficient handling of goods ranging from small packages to boxes, skids, and built-up units, the e-commerce centre will also be furnished with an automatic sortation system and electronic transport vehicles (ETV) (BUPs).

The 2020–2021 fiscal year saw an annual freight uplift of around 770,000 tons for Ethiopian Cargo & Logistics Services, a significant global cargo network operator with a sophisticated warehouse able to accommodate one million tons annually.

With 66 specific cargo destinations in Africa, the Middle East, Asia, Europe, and the Americas, as well as 14 specialized freighters, it services more than 130 foreign locations. With 100% e-AWB from its primary hub in Addis Ababa, Ethiopian Cargo & Logistics Services also uses the most recent technology for data, information, and market intelligence.

The airline is also planning to become a Star Alliance member, in order to compete with Gulf rivals that are strong in connecting passengers between Asia, the Americas, and Europe.

As Africa’s largest airline, Ethiopian’s fleet size is expected to grow from its current count of 140 to more than 271 aircraft by 2035, operating in over 200 routes globally and carrying 65 million passengers annually.

Flights from Atlanta (ATL) to Bole International Airport in Addis Ababa (ADD) are slated to begin May 16, 2023. The rotation will run four times weekly, with a fueling stop in Dublin, Ireland, on the outbound journey and flying non-stop on the return to Atlanta.

Ethiopian Airlines also serves the North American cities of Chicago O’Hare (ORD), Toronto Pearson (YYZ), Washington Dulles (IAD), and New York (JFK).

Service to Denmark’s capital Copenhagen from Addis Ababa will also start in May this year after a 10-year hiatus. A non-stop from Addis Ababa to Singapore will be relaunched in March, 2023 after ceasing in 2017. The carrier will also resume its pre-pandemic services to China in March, one of the few international carriers to do so since China re-opened its borders in January 2023.

Ethiopian Airlines is also eyeing to compete with Emirates and Qatar Airways, thus setting courses for rapid expansion into Africa. Qatar Airways has already invested in the new airport in Rwanda’s capital Kigali and will be aiming to have tie-ups with RwandAir.

Kenya Airways and South African Airways are also making similar moves. The two carriers, which have code-sharing and shared lounge accesses, are working towards forming a new pan-African partnership.

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“We have agreed that that agreement should be progressed forward as it presents an opportunity for South Africa and Kenya to work together to build a pan-African airline,” said Kenya President William Ruto.

William Ruto’s South African counterpart Cyril Ramaphosa remarked, “We are committed to ensuring that the agreement that was signed between our two airlines goes forward.”

In November 2021, Kenya Airways and South African Airways signed a strategic partnership framework to discuss forming a pan-African airline by 2023. Both airlines have been going through financial headwinds due to the after-effects of travel restrictions and border closures during the COVID pandemic. However, experts are fearful about the whole plan.

As both airlines are now seeking exemptions from aviation watchdogs, analysts are fearing that such protectionist tendencies may further hamper the efforts to establish the Single African Air Transport Market (SAATM)

SAATM was launched in 2018 to implement the 1999 Yamoussoukro Declaration, under which African Union member states agreed to the principles of open skies. Despite the Declaration having two-thirds of the signatories, not a single flight has been taken up under the SAATM initiative in the last four years.

Nearly two-thirds of African Union member states have signed up to SAATM since it was launched in January 2018, but not a single flight has taken off under the initiative.

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Since international travel is in the recovery mode due to the lifting of the COVID restrictions, airlines are looking for new routes. Cape Town is one such tourist travel destination sought by competing carriers in the US.

The airlines’ flights to Johannesburg were re-established after the documents suggested by the United States Department of Transportation were made public just before the flights were restored. The airlines were also forced to abandon their offer after it reached a dead end. All of this was attributed to South Africa’s refusal to alter the airline’s Foreign Operator’s Permit. In turn, the US Department of Transportation canceled the South African Airways (SAA).

Back in February, Delta Airlines filed a fresh proposal for nonstop flights to and fro from Atlanta and Cape Town. Fast forward to 2022, the Federal Aviation Administration accepted Delta Air Lines’ proposal to operate in the triangle route. This will be from Atlanta, Johannesburg, and Cape Town.

In a statement, David Maynier, the provincial minister of finance and economic opportunities said, “We will continue to work hard to expand ‘air access because more flights mean more tourists, who in turn mean more jobs in the Western Cape.”

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In this regard, SAA’s interim chief executive, Thomas Kgokolo, said that their intention is to create the most formidable airline in Africa, benefiting from at least two attractive hubs in Johannesburg, Nairobi, and possibly Cape Town.

He further added that the next possible step is South African Airways and Kenya Airways is to set up a joint working group to further discuss the memorandum and put in place systems to achieve their jointly stated objectives.

In a statement, he said, “This joint memorandum with Kenya Airways, one of the continent’s strongest and most respected carriers, will do just that. […] Part of SAA’s core remit is to be a significant enabler of business and trade in Africa and it’s through a strategic understanding like this that real progress will be made in advancing South Africa and the continent’s growth.”

According to Kenya Airways chief executive officer Allan Kilavuka, the carrier would need to ask its lenders for more deferrals of capital repayments as it waits for parliament to approve its planned nationalisation.

Stating that lenders have been understanding so far, Kilavuka expects them to continue offering their support towards the carrier. Currently, the government of Kenya owns 48.9 percent of the carrier. While Air France-KLM owns 7.8 percent, the remaining 38 percent are owned by different lenders.

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Ethiopian Airlines caught everyone’s attention when chief executive Tewolde Gebremariam said that they are in talks with Mauritius and South Africa to revive the debt-ridden and struggling company.

Although no deal has been agreed with South Africa yet, Ethiopian Airlines was willing to hold negotiations to revive itself from years of struggle.. Ethiopian Airlines was a success story much before the start of the pandemic. While its peers South African Airlines and Kenya Airways are on the decline, Ethiopian Airlines has been on the rise. And as things stand, it looks like even the coronavirus pandemic cannot stop the carrier from achieving its goal to become the best African airline by 2025. Also, while many airlines have sought bailout packages from their government, cut jobs and let go employees, Ethiopian Airlines somehow managed to survive the pandemic without any financial aid or reducing job count to cut cost.

Ethiopian Airlines seeks to dominate African aviation
Last year, media speculations suggested that Ethiopian Airlines has shown interest in South African Airways as the embattled state-owned carrier has opened up to the possibility of outside investment. South African Airways has been running on a loss since 2011. It is reported that Ethiopian Airlines considered acquiring a stake in South African Airways. Back then South African President Cyril Ramaphosa announced that the carrier was open to the participation of the private sector. He further emphasised that the carrier is also in talks with a few potential investors. However, Tewolde GebreMariam claimed the two airlines did not have any constructive discussions which would suggest a potential stake acquisition. It is worth noting that Ethiopian Airlines is no stranger to investments in African aviation. Over the years, it have made strategic investments in ASKY Airlines, Ethiopian Mozambique Airlines, Malawi Airlines and Tchadia Airlines, which clearly implies that the carrier wants to build a network of feeder airlines covering as much of Africa as possible, with the airline providing the hub and spoke connection to the rest of the world. In this regard, the decision to buy South African Airlines makes sense for the carrier. Many argue that Ethiopian Airlines’ decision to invest in South African Airways could be a part of its broader plan to dominate the aviation sector in Africa.

It has gracefully survived the pandemic
Even though things are returning to normal, it will still take a considerable amount of time to return to pre-Covid levels. Global air passenger traffic will not return to pre-Covid levels until 2024, according to The International Air Transport Association (IATA). Also, the overall domestic passenger traffic was 86.5 percent less in June 2020 compared to the same period in 2019. More recently, IATA confirmed that the global airline industry had its worst quarterly financial performance in the second quarter of this year, extending the losses incurred during the first quarter of 2020. In June, both passenger and cargo demand continued to recover from the low point in April as countries ease lockdown measures. IATA published a report in June which observed that African airlines are forecast to lose around $2 billion in 2020.

IATA has been stretching the importance of bailout packages since the pandemic started. Many governments had in fact announced numerous bailout packages to help the aviation sector deal with the crisis. However, Ethiopian Airlines received no funds in the form of a bailout package. Some airlines have secured record bailouts from their governments, while those who haven’t are on the brink of collapse. Surprisingly, the carrier is making ends meet and is also paying all its overhead costs and fixed costs, in addition to every other financial commitment.

Interestingly, Ethiopian Airlines has not defaulted on any payment so far. It has also converted 25 of its 777s passenger aircraft to increase its cargo capacity. The carrier stripped out the passenger seats to give cargo capacity both above and below the wing. In April, despite losing around half a billion dollars to the pandemic, Ethiopian Airlines survived and stayed afloat through its cargo business alone until July. Now, as passenger demand gradually grows after restrictions were lifted, some of those 777s are being put back into its original form. The decision to rapidly pivot cargo has helped the carrier fight the pandemic during its peak. Ethiopian Airlines has also been busy working on repatriation flights and became the only airline to continue to fly to China while patient cases increased on the mainland. Since the outbreak, the airline has been a preferred choice for governments to transport passengers back home.

What makes Ethiopian Airlines stand out from its global peers?
Over the years, Ethiopian Airlines has established itself as Africa’s largest airline, with 19 million total seats in 2019. In 2018, the carrier was announced as the leading airline by passenger capacity operating in sub-Saharan Africa, overtaking the Emirates. It is also Africa’s leading airline financially. It is an impressive feat for the airline as many other big names in the continent are running in substantial losses for one reason or the other, notably South African Airways and Kenya Airlines. What’s impressive is despite Ethiopian’s financial success, the carrier is implementing a heavy cost reduction programme targeting between 10 percent and 20 percent savings each year.

The success of Ethiopian Airlines can be attributed to two factors. First: It is the airline’s clarity of vision and independence from the government in day-to-day operations. In fact, Ethiopian Airlines achieved its Vision 2025 targets in 2018 and is now working toward realising its Vision 2035. Despite being state-owned, Ethiopian Airlines has been operating its day-to-day business independently as a commercial entity, which was further supported by competent leadership and well-trained staff. To put things into perspective, we can say that the government is the owner of Ethiopian—but its business has been profoundly managed like any other corporation.

Second: Ethiopia’s geographical location has also contributed immensely to establish itself as an aviation hub connecting Africa with the Middle East, Asia and Europe. In recent times, Addis Ababa has become a hub, where it is able to attract and transfer much more traffic, particularly from Asia moving on to the American continents. Addis Ababa is also developing Africa’s largest airport. Ethiopian Airlines is spending an estimated $5 billion to develop the port which could possibly become Africa’s busiest airport capable of handling more passengers than the current busiest hub in Johannesburg, South Africa.

The decision comes at a time when its current base in Addis Ababa Bole International Airport is finding it difficult to manage the fast-growing capacity. Less than a decade ago, Bole handled fewer than a million passengers a year. But the success of Ehtiopian have contributed heavily to rise in passenger inflow at the airport. Notably, it rose to 7 million in 2014. Many reports suggest passenger numbers are expected to continue increasing by about 18 percent each year. The new airport will cover an area of 35 square kilometres. Reports suggest the airport will be developed in Bishoftu, a town 39 kilometres southeast of Addis Ababa, and will have the capacity to handle 100 million passengers a year. The construction of the new airport was expected to start during the second half of 2020. However, that decision was taken before the coronavirus pandemic plagued the global aviation industry.
The carrier has successfully completed a new passenger terminal at its hub Addis Ababa Bole International Airport. The new terminal, developed by Ethiopian, has check-in hall with 60 check-in counters, 30 self-check-in kiosks, 10 self-bag drop/SBD/, 16 immigration counters with more e-gate provisions, 16 central security screening areas for departing passengers are the new faces of the airport. Also, three new contact gates have been developed for wide-body aircraft and 10 new remote contact gates with people mover – travellator, escalator, and panoramic lifts. The new terminal has 32 arrival immigration counters with eight egate provisions. With regard to the new terminal, Mr. Tewolde GebreMariam, Group CEO of Ethiopian Airlines the Addis Ababa Bole International Airport has overtaken Dubai to become the largest gateway to Africa last year, and the new terminal will play a key role in cementing that position.

The financials of the carrier last year appear to be impressive. Last March, a Boeing 737 MAX 8 aircraft operated by Ethiopian crashed near the town of Bishoftu six minutes after takeoff, killing all 157 people aboard. The crash was the deadliest aircraft accident to ever occur in the country, surpassing the crash of an Ethiopian Air Force Antonov An-26 in 1982, which killed 73. Despite that, the carrier reported an operating profit of $260 million, with $4 billion operating revenues. The carrier’s net profit for the year stood at $189 million, which was $18 million less then the net profit earned in the previous year. Ethiopian Airlines is not another success story, but presents a unique example of how a state-owned organisation should be operated in the modern age. The carrier has demonstrated the right range of commitment, corporate mechanism and government support coupled with a high level of efficiency.

The profound success of Ethiopian Airlines is based on the fact that the Ethiopian government has provided deep protection to its own airline. For a foreign airline, it is extremely difficult to get landing rights in Addis Ababa. The government also strictly regulates and limits other carriers flying to other domestic locations within the country. It is worth pointing out that Ethiopian Airlines has invested heavily in modernising its fleet which is now the youngest on the continent.

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The Department of Public Enterprises said that the new airline would ideally have a mix of governmental and private ownership.

It was further revealed that the contracts of all South African Airways employees will be terminated, however, they will be given preference when the hiring for the replacement airline begins.

The government is also expected to set aside a severance package of around $117 million.

In a statement, The National Transport Movement (NTM) president, Mashudu Raphetha said, “It is a very sad day for the whole of the Republic that South African Airways is now going to shut down and we are now going to witness the emergence of the new airline.”

Earlier this year, it was reported that the Development Bank of Southern Africa, the state-controlled bank of South Africa, has averted the impending ruin of South African Airways (SAA) by pumping in R3.5 billion ($240 million) as a bailout package into the beleaguered state-owned airline.

According to a statement from the South African Airways business rescue team, it said that in order to still keep the airline operational, it would be instantly utilising R2 billion out of the overall funds provided by the bank.

Recently, the carrier suspended all of its operations to help curb the spread of the novel coronavirus, which originated in the Chinese city of Wuhan last year and has pushed the global economy into recession.

Last month, local media houses reported that South African Airways is on the verge of collapsing after the carrier failed to reach an agreement to secure additional government funding.

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The carrier also plans to let go of its entire workforce, which will see around 4700 South African Airways’ employees lose their job.

In a statement, the carrier said, “It is unlikely that the company will be successfully rescued as a result of the business rescue process. In order to make payment of the severance packages … the company is required to sell and dispose of its assets.”

According to a company memo acquired by Bloomberg, the employees will be paid one month’s wages for every year that they have worked for the airline. They will also be paid for unused annual leave.

Peter Attard Montalto, head of capital markets research at Intellidex said that all the doors are closed for South African Airways, the only way left is liquidation.

Earlier this year, media houses reported that the Development Bank of Southern Africa, the state-controlled bank of South Africa, has averted the impending ruin of South African Airways by pumping in $240 million as a bailout package into the beleaguered state-owned airline.

Last month, the carrier announced the cancellation of all its operations till May 31st to help the country deal with the coronavirus pandemic.

The announcement from South African Airways follows the South African government’s decision to lock down the country for the next 21 days to curb the spread of the novel coronavirus, which originated in the Chinese city of Wuhan last year.

The airline also announced that its acting chief executive officer Zuks Ramasia, who has held the position since June 2019, will be stepping down from his position.

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^{Last week, South African Airways announced that it will cancel all international flights till May 31. However, recently the airline announced that it is cancelling all its domestic and regional operations till May 31 as well.}

^{The announcement from South African Airways follows the South African government’s decision to lock down the country for the next 21 days to curb the spread of the novel coronavirus, which originated in the Chinese city of Wuhan last year. The lockdown will go into effect from today, March 27.}

^{With regard to the suspension of operations due to the coronavirus outbreak, Todd Neuman, South Africa Airway’s executive vice president for North America told the media, “Our North America Regional Office in Fort Lauderdale, Florida and all commercial departments will suspend operations at close of business on Thursday, March 26 and will remain closed through April 15, 2020.”} 

^{“Our utmost desire during this present period of uncertainty is to continue providing duty of care to our valued customers. All customers holding an unused ticket will be able to use its full value as a credit for travel on SAA-operated flights over the next two years, up to March 25, 2022. This is part of SAA’s commitment to support our customers during these unprecedented times and provide flexibility to encourage them to reschedule their travel to Africa at a later date.”}

^{The airline also announced that its acting chief executive officer Zuks Ramasia, who has held the position since June 2019, will be stepping down from his position next month.}

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