Comair 737 MAX.jpg

Comair Suffers From SAA Technical Mismanagement

Expensive, short-term leased aircraft to replace the grounded Boeing 737 MAX resulted in further issues.

Deficiencies at South African Airways’ maintenance arm, SAA Technical, have caused third-party customer Comair to seek a variety of alternative solutions.

Already hit by the grounding of the Boeing 737 Max, Comair’s need to draft in replacement aircraft on expensive short-term leases was exacerbated by maintenance scheduling problems and parts shortages at SAA Technical, the airline said in its 2018/19 annual report.

Altogether, the South African carrier estimated that the above problems contributed to ZAR195 million ($10.5 million) of extra costs in the year to 30 June 2019, which led to a 68% fall in operating profit.

“Comair sustained substantial losses as a result of both the maintenance challenges and the grounding of the MAX, incurring fixed costs such as finance and maintenance costs over and above short-term aircraft leases, without generating the commensurate revenue or contribution anticipated of the MAX,” the airline stated.

To resolve the situation, Comair is transferring line maintenance work to Lufthansa Technik and moving heavy maintenance overseas.

In the longer term, it plans to perform heavy maintenance itself following its acquisition of Star Air Maintenance and Star Air Cargo.

Its problems highlight how years of chronic mismanagement of South African Airways were not confined to the airline itself.

Roughly a year ago, the then head of SAA Technical was replaced after only six months following a government audit that found serious accounting irregularities and insufficient controls in place to manage and monitor inventory.

Those issues appear to have directly contributed to Comair’s difficulties in 2018/19, although the airline was also the beneficiary of SAA mismanagement, winning an almost ZAR1.3 billion settlement over past anti-competitive behavior by the flag carrier.

That settlement allowed it to more than double its pre-tax profit for the financial year despite its operational difficulties.

TAGS: Airlines
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