(Updates with quote, details)
CAPE TOWN, Sept 2 (Reuters) - South African Airlines (SAA) is close to finalising the cancellation of a contract to supply 10 Airbus A320 aircraft as part of plans to get the national carrier back to profitability, its chief financial officer said on Wednesday.
The cancelled aircraft will be replaced with five new Airbus A330 aircraft from early 2016, said CFO Wolf Meyer, as part of a fleet overhaul to help the company reduce a costly fuel bill.
“We need to get the final approval from the board who can sign the documents and then we’re done,” Wolf Meyer told reporters at a parliamentary briefing, adding that approval was expected within days.
The A320 contract was originally for 15 aircraft and was renegotiated in 2008 for a total of 20 aircraft. So far, only 10 have been delivered, with the first delivery made in 2013.
The original contract had escalation clauses and the price of the aircraft went up, Meyer said.
“It was hurting us,” he said.
He said the loss-making SAA, which falls under the National Treasury, has renegotiated more favourable leases for its A340 aircraft and may even consider selling the two it owned.
The company has achieved savings of 2.2 billion rand ($164 million) in savings since 2013 as it looks to reduce staff and cancel unprofitable routes, Meyer added.
SAA, which has received two government bailouts totalling 10 billion rand ($834.33 million), is in the middle of a turnaround strategy after the government rebuffed another cash injection.
$1 = 13.3970 rand Reporting by Wendell Roelf; Editing by James Macharia