Political as opposed to economic factors are the major downside risks to the airline industry and many carriers will continue to grapple with politically driven objectives, says Kapil Kapa, the CEO at the Centre for Asia Pacific Aviation. Uncertain global politics and rising oil prices are expected to generate challenges for carriers, including SA Airways, and the sector could see a big shakeup over the next three years. A tougher outlook for the global aviation sector comes as SAA grapples with a financial crisis that poses a risk to the fiscus, and SA’s sovereign credit rating. SAA reported that its 2017/2018 financial loss was R3bn worse than expected, at R5.7bn. SAA saw sales plunge 21% on domestic routes, 11% on international routes and 6% on regional routes. SAA, which has recently undergone a board revamp and the appointment of a new CEO, is pursuing a turnaround strategy that includes rationalisation of routes, and may lead to the introduction of a strategic equity partner a...

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