South African Airways gets unlikely help from coronavirus hit

While international airlines have been blindsided by the impact of the coronavirus on global travel, the outbreak may bring unexpected benefits for SAA as it battles to lower costs. A sharp reduction in international flights has deflated the price of leasing jets and made it easier for state-owned SAA to re-negotiate terms, according to Siviwe Dongwana, one of two administrators hired by the government to draw up a turnaround plan. Equally, this week’s oil-price crash triggered by Saudi Arabia and Russia will lower the cost of fuel, he said. “The coronavirus issues and the impact on the industry means that a lot more lessors are going to find themselves with a lot of aircraft,” the administrator said Wednesday in Bloomberg’s Johannesburg office. “At a risk of being too much of an optimist that’s a silver lining for our renegotiation of aircraft.” While the coronavirus may have significantly cut demand for international travel, an enforced reduction in flights to hubs such as London could help SAA preserve cash in the short term by taking out landing fees and fuel bills, said Dongwana, an accountant who once served as the country’s director general in the public works ministry. Many of SAA’s routes are loss-making anyway and the load factor on its planes -- or the amount of seats filled -- fell to 71% in January as flyers feared for the airline’s survival.<br/>