Press Release by Jeff Radebe, Minister for Public Enterprises
Parent of Swissair Pledge Broad Strategic Co-operation to Build SAA into a Top Global Carrier.
In his 'State of the Nation' speech to Parliament today, South African President Thabo Mbeki revealed that SAirGroup, the parent of Swissair, reached agreement last night to acqauire a 20% stake in South African Airways from Transnet.
Under the terms of the definite agreement signed in London by Transnet Managing Director Saki Macozoma and SAirGroup CEO Phillipe Bruggisser, the Swiss company will acquire its stake for US$230-million or R1.4-billion. The agreement arises from tough negotiations that required close attention to fine tuning a number of details. Concessions have been made on both sides.
This agreement comes after many months of intense work undertake by my predecessor Minister Stella Sigcau. It represents a fine example of the implementation of government policy for the restructuring of state owned enterprises.
It will speed up the already impressive advances SAA have made to ensure greater economic and financial efficiency, to open the way for skills transfer and to enhance our prestige internationally. SAA's competitiveness in the international aviation market will increase. We, as government, see this transaction as further evidence of the ANC led government's commitment to remove unnecessary claims on state funds. Furthermore we wish to make government's investment in Public Private Partnership of this type more profitable to ensure better application of our RDP objectives.
For example, In network and alliance strategy, the link with Swissair will help us cement major relationships in Asla and North America, while sharply improving our competitive position in Europe and opening many new global destinations for travellers to and from South Africa. In human resource development, the Swiss enterprise two
have committed to train scores of SAA's most promising young leaders through Swissair's highly-regarded management development programme and to export to South Africa and Apprentice Programme that has worked so effectively in training and developing young people in Switzerland." Said Jeff Radebe, Minister for Public Enterprises.
SAA's Chief Executive Officer Coleman Andrews has informed me that this partnership is a great step forward for the customers, employees and shareholders of South African Airways. Swissair is uniformly regarded as one of the most outstanding international airlines in the world-justifiably renowned for first-rate customer service, technical excellence and strong financial performance. We have worked closely with Swissair for much of the past year in building an innovative alliance relationship. The successes already recorded in that alliance give us both great confidence that we can do great things as long-term equity partners.
Andrews has underscored that SAirGroup's successful bid was based on a bold, comprehensive plan to add significant value to SAA as it implements its 'Strategy for Winning.' "Our Swiss colleagues made a compelling case for how they can assist our development on several fronts, In aircraft acquisition and financing, SAA can expect major savings to flow from our partnership. In our Technical business, SAirGroup has committed up to 15 wide-body aircraft a year that will be overhauled by South African Airways. This alone will sustain approximately 300 jobs in the technical field while catapulting SAA into the top tier of global aircraft maintenance providers."
Andrews concluded: "I cannot imagine a better long-term partnership for South African Airways, or a stronger initial foundation on which to build a successful and enduring relationship."
SAirGroup CEO Phillipe Bruggiser outlined the basis for his company's interest in South African Airways: "We have carefully watched SAA's impressive turnaround in the past year and we are convince that SAA is well on its way to becoming one of the most successful airlines on the global aviation scene. Under the skilful guidance of Transnet MD Saki Macozoma and SAA CEO Coleman Andrews, South African Airways is making all the right moves in executing its 'Strategy for Winning.' We believe that we can help take SAA further, faster."
"The agreement transforms the combination of SAA, Swissair and the other Qualiflyer Group airlines into the strongest airline alliance on the African continent with over 40% of the traffic between Africa and Europe. We have a joint strategy that will swiftly expand our position in East, West and Southern enterprise three
Africa. These markets are growing rapidly and profitably and will respond very favourably to the combination of customer service and technical excellence that our two companies are uniquely positioned to provide."
SAA's customers can expect significant service benefits from the close linkage that we envision between SAA's Voyager programme and Swissair's Qualiflyer programme. Customers can also expect to gain as we knit together our European and African systems with our other alliance partners in the Americas and Asia.
The two companies are aggressively exploring a range of further collaborative activities in aircraft and engine maintenance, information technology, catering, ground handling, cargo and fleet management. In the next few weeks, joint task teams from both companies will work to define the full scope of co- operative effort in these areas.
In connection with this transaction, Transnet was advised by Merrill Lynch International and SAirGroup was advised by Dresdner Kleinwort Benson.
Minister Radebe wishes to place on record government's gratitude to officials of his department, employees of Transnet and SAA, in particular, Mr Saki Macozoma, MD and Mr Coleman Andrews, CEO of SAA for all their hard work. "To all the staff of SAA, I trust that this agreement will be welcomed as it opens the way for you to provide even high levels of service to which we as passengers and clients of SAA are accustomed."
For further info.
Contact:
ZAID NORDIEN
MINISTRY FOR PUBLIC ENTERPRISES
Cel: 082 453 6224
Tel: 021-4614339
Fax: 021-4652381
THAMI DIDIZA
HEAD OF COMMUNICATIONS: TRANSNET
083 286 2833