South African Airways (SAA) has lost $5 million (K1.2 billion at the current exchange) in Malawi due to the 49 percent devaluation of the kwacha, the companyâ€™s country manager James Chikaonda has revealed.
But Chikaonda said the company has survived the crisis because it is an established multi-national.
The Reserve Bank of Malawi (RBM) on May 7 devalued the local unit and subsequently floated it to respond to market forces of demand and supply.
A number of multi-nationals operating in the country who trade in kwacha and later repatriate their proceeds in dollars to their countries have made huge losses due to the devaluation.
Chikaonda, speaking at a sensitisation seminar of the personnel who handle travel bookings in government and corporate institutions on Thursday in Lilongwe, said the recent devaluation of the kwacha has hit the company hard.
“Many airlines are suffering worldwide due to a number of reasons, but to us one of the things that affected us most this year is the devaluation of the Malawi kwacha. The other problem that we are also facing is that we deal in countries with weak currencies which also have restrictive access and their markets are highly regulated,” he said.
Chikaonda said these are some of the reasons the airline industry in Malawi is not expanding despite have potential on the markets.
He disclosed that elsewhere some airlines such as Span and Malev have collapsed due to the problems besetting the airline industry such as rising costs of fuel, increase in airport and industry taxes, escalating costs of catering services and inefficient aircrafts.
He, however, said despite the challenges faced by SAA, the company has a survival kit which will enable it to be among the best airlines in the world.
Chikaonda disclosed that the company has embarked on regional growth into the Southern Africa Development Community (Sadc) to the extent that it is now flying to destinations such as Ndola in Zambia, Bujumbura in Burundi, Pointe Noire in the Democratic Republic of Congo (DRC) and Cotonou in Benin.
As part of its survival plan, the company has also embarked on a programme of replacing the Boeing brand with the modern Airbus family which is setting high standards in the aviation industry worldwide.
“We know that when we have a single brand fleet, it will be easy to manage,” he said.