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South African Express Airways (SA Express) Turnaround Strategy 14 June 2016

South African Express Airways (SA Express) Turnaround Strategy 14 June 2016. This document is confidential and circulation is restricted. Contents. Purpose, Vision and Values. 1. 2. Fact Sheet. 1. 3. 20:20 Vision Turnaround Strategy. 1. 6. Challenges and Strategic Interventions. 4.

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South African Express Airways (SA Express) Turnaround Strategy 14 June 2016

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  1. South African Express Airways (SA Express) Turnaround Strategy14 June 2016 This document is confidential and circulation is restricted

  2. Contents Purpose, Vision and Values 1 2 Fact Sheet 1 3 20:20 Vision Turnaround Strategy 1 6 Challenges and Strategic Interventions 4 9 5 Conclusion 1

  3. Purpose, Vision and Values Purpose and Vision give rise to our core values • The strategic mandate for SA Express is to achieve: • A sustainable capital base and financial efficiency; • Commercial and operational efficiency and effectiveness; • Co-operation and consolidation; and • Capital expenditure and new route development. • These objectives are in line with Section 34 of the SA Express Act of 2007

  4. Fact Sheet 2016/17 2014/15 2015/16 2013/14

  5. Fact Sheet SA Express Historical Performance

  6. 20:20 Vision Turnaround Strategy The SA Express 20:20 Vision Strategy was submitted to the Minister of Public Enterprises in July 2013. The 20:20 Vision is a 20 year strategy aligned to South African Airways’ (SAA) Long Term Turnaround Strategy (LTTS). Rationale of the 20:20 Vision strategy is to: • Assess, review and define a business model that will improve the sustainability of the organisation. • Continue to meet the requirements of the National Developmental Objectives.

  7. 20:20 Vision Turnaround Strategy Despite the achievements above inherent financial challenges are continuing to impede the full implementation of the 20:20 Vision Strategy.

  8. Challenges and Strategic Interventions Weak Balance Sheet 5 6 Legacy Debts Low Appetite from creditors High Cost Structure Aircraft maintenance Backlog Flight Schedule Disruptions 3 4 1 2 • Recapitalisation • Aircraft acquisition • Negotiate repayment plans with creditors • Shareholder cash injection • Sale of obsolete stock • Strengthen the Balance sheet • Improve relationship with financiers • Stabalise business operations • Shareholder intervention • Cost cutting and Containment • Aircraft lease cost reduction • Optimal business operations • Shareholder Cash injection • Establish good relationship with spare suppliers and Original Equipment Manufacturer (OEM) • Enhance Supply Chain Management Processes • Re-engineer aircraft maintenance Programme • Increase Dispatch of aircraft • Return all aircraft to service • Replace returned aircraft

  9. Conclusion SA Express is a strategic asset to the Republic of South Africa for the following reasons: • Fulfilment of the National Developmental objectives. • Facilitating Transformation in the airline sector • Facilitating growth in the aerospace sector • Supporting Provincial Economic Developmental objectives • Facilitation of travel, tourism and trade within the region • Fostering airline market competiveness and efficiencies • Providing air transportation linkages between rural and urban centres. • Supporting diplomatic ties between South Africa and the African region • Supporting future operations of the commercial aircraft currently developed by Denel

  10. Thank you

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