Airways Park, Kempton Park, 7 March 2002
The well-being of a robust airline is reflected in its ability to offer superb customer service, the morale of its staff, air and cabin crew, its financial dexterity in an intensely competitive environment, and its pride in the fleet of aircraft that are its most public face. Over the years, SAA has built an international reputation and represented South Africa in the skies and at airports around the world. At all times it has done this with some of the most remarkable aircraft ever designed. So, from its first acquisition of the German-built Junkers aircraft in 1938, through a range of other types including Dakotas [many of which saw service in World War 2 and flew with SAA thereafter], Viscounts, DC-10s, the early Boeings and more recently, various Airbus aircraft, SAA has built up a long tradition of seeking the best to be the best.
When SAA's first Boeing 747 took to the skies in 1976 and flew from Johannesburg to Cape Town and back again along the coast, showing off its new lumbering giant to amazed South Africans, many of us were youngsters and most never even dreamed of ever flying in such awesome beasts. International air travel has now become de rigeur, tempting many to simply take it for granted as the most convenient way to travel to overseas destinations. With the exception of the Helderberg tragedy, SAA's international record has been a fine one.
Since 1994, SAA has truly become an international airline. The return of South Africa to respectability saw major opportunities and challenges arise for its long-haul operations. The opportunities lay with the expanded market, the potential of more destinations, a rationalisation of routes to cut out the ill effects of previous airspace embargoes, a wider range of partnerships, and investing SAA with a truly proud South African brand.
The challenges included most notably increased competition, rapid advances in technology that emphasised the age of our fleet, and the manner in which environmental concerns had also placed huge burdens on our aircraft. The peculiarities of our geography, most notably Johannesburg's high altitude and rarefied highveld air in the heat of summer, and the fact that most of our international routes take our planes over vast stretches of ocean, also came into much sharper focus. Recently, the escalating costs of fuel, labour and insurance also needed to be factored into any equations.
The current acquisition of new aircraft takes place in unforeseen circumstances in international aviation following September 11. It is not based on securing short-term gains and returns designed simply to address financial pressures. The acquisition takes place within a long-term strategy for SAA, designed within the airline to transform the company into Africa's predominant airline and the international airline of choice for business travellers and tourists both to and from our part of the world. The long-haul selection process has been driven by management with strong inputs from constituent elements, including the pilots and technicians of the airline itself, including extensive cooperation from the industry. The priorities, specifications, and requirements are thus home-grown, rather than presented by external consultants. We are fortunate that the acquisition has taken place firmly under the ambit of the Public Finance and Management Act so that the principles of corporate governance have been clearly defined and honoured. Thus, the presentations made to the SAA Board were rigorously examined prior to a recommendation to SAA's shareholder, Transnet. The Transnet Board, likewise, subjected the recommendation to thorough examination.
I received the request for approval from the Chairperson of Transnet, Dr Bongani Khumalo. It included a very detailed outline of the nature and extent of the proposed acquisition. I have satisfied myself, in terms of my responsibilities under the PFMA, that the adjudication process was rigorous, technically sophisticated, fair and transparent. The National Treasury has also been informed of the decision. The financing of the acquisition will be met from SAA's reserves in terms of particular arrangements negotiated with the successful bidder. Ladies and Gentlemen, the global airline industry, and by extension, the global traveling public, is extremely fortunate to be served by two giants, Airbus and Boeing. The excellence of their products, the safety measures that both honour, the technical, design, and performance standards both employ are truly superb. The aesthetic beauty of their rival products is matched by unique elements that make their products distinctive. Similarly, the engines that power these magnificent aircraft are works of art, involving the most intricate of up-to-date technologies.
I wish to thank Airbus and Boeing for the manner in which they have interacted with SAA. I am told that the fiercest of competitions has been conducted with strict observance of all the necessary corporate Queensbury Rules such that the two bidders have indicated their satisfaction with the process as well.
At the end of the day, the decision for SAA revolves around which of the specific aircraft on offer fit our conditions and requirements best. I have already indicated what some of these are. It is with great pleasure that I can today announce the successful bidder for the acquisition of a new, long haul fleet to be Airbus Industrie.
In conclusion, let me add a few words to outline Government's view on the decision. We welcome this acquisition as a sign of confidence in the ability of SAA to build on its status as an international airline capable of being among the very best in the world. SAA has designed a strategy to carve a particular niche for itself in aviation, and SAA has the whole-hearted support of the South African Government in this endeavour. At the same time, a Government team will shortly begin work together with SAA and Transnet to develop restructuring initiatives for SAA as a whole now that we have reacquired the Swissair share and agreed to this major acquisition. Our proposals will be designed to enhance the long-term strategy of the airline. At the same time, Airbus Industrie draws closer the strong relationship we have with countries of the European Union.
Airbus as we know is a consortium of companies drawn from countries such as France, Germany and the United Kingdom. We look forward to further cooperation with Europe and Airbus countries in particular. Government has the utmost confidence in SAA. We are gratified with the hard work that has been done around this acquisition process by management and the Boards of Directors concerned. I would like especially like to thank Bongani Khumalo, Don Ncube and Andre Viljoen for their leadership during this time. We wish you further success as we build SAA's future together. It is my wish that those who fly, those who serve as cabin crew, the technicians who tend these aircraft, and all those who will travel in them, will do so in high spirits.
I thank you.