South African Airways is talking to the Ghanaian government about establishing a West African hub in Accra and setting up a new joint venture airline in the region with the Mango or SA Express brand.

SAA CEO, Siza Mzimela, told the Parliamentary Portfolio Committee on Public Enterprises in Cape Town on August 28, that SAA would take a 49% equity stake in the new airline. It would increase its South Africa-Ghana capacity to feed long-haul traffic from its other destinations, including South America, Asia and Australasia, to the new airline – drawing more traffic through Johannesburg.

Referring to SAA’s failed attempt to establish an East African hub with Air Tanzania, Mzimela said: “We have learned from past lessons that it is very important that we have a strong and reliable local partner. Our efforts in Tanzania failed because there was no feeder traffic. In West Africa, we need to ensure that we have a strong feeder network.”

He said SAA also planned to export its low-cost Mango brand into the rest of Southern Africa, in particular to grow lucrative leisure routes to destinations such as Mauritius, Zanzibar, Kilimanjaro, Mombasa and Livingstone.

All this forms part of a three-pronged Africa growth strategy that will see SAA replicating its brand and operating hubs in new African markets, including Mango regional operations.  Mzimela said SAA’s strategy was based on the example of LAN Chile, which had overcome its “end of hemisphere” disadvantage by establishing branded hubs in other parts of South America. It is also examining whether the east-west partnership between ASKY Airlines in Togo and Ethiopian Airlines could be replicated into a north-south model involving SAA and SAX.

SAA’s growth strategy also entails developing new routes into Africa and increasing capacity from its Johannesburg hub. The airline is working with the Department of Transport to overcome restrictions in bilateral air traffic agreements in markets such Mozambique; the DRC (where it is restricted to four weekly frequencies but wants to operate six); and Angola (where it wants to fly double daily but is restricted to daily flights). The airline also plans to expand the role in Africa of its non-airline subsidiaries, such as SAA Technical and Air Chefs.

Mzimela said although SAA had grown its African market share from 43% in 2007 to 51% in 2012, it was playing a catch-up game compared with its competitors, which continued to grow. Emirates alone has increased its network in Africa by 230% in the past six years. Whereas SAA has only increased its monthly seats by 3% since 2006/7, during the same time seat capacity at EgyptAir increased by 71%, at Ethiopian Airlines by 74% and at Kenya Airways by 25%.

“Without having more aircraft, we currently have to use our wide-body aircraft on domestic and regional routes such as Windhoek, Nairobi or Cape Town to accommodate extra routes. But we can only do that up to a point. In order to grow more we will need more aircraft,” he said.