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Etihad Partners With South African Airways to Expand Footprint

May 6 (Bloomberg) -- Etihad Airways PJSC signed a route-sharing alliance with state-owned South African Airways as the Abu Dhabi-based carrier expands its reach into Africa.

SAA, as the state-owned airline is known, will code-share on 12 Etihad routes, while the Middle East airline will access 10 new African cities, the companies said today in Johannesburg.

Etihad Chief Executive Officer James Hogan is seeking deeper ties into Africa, where he predicted passenger traffic will expand 6.8 percent a year until 2016, making it the fastest growing region in the world.

“Our road map in Africa is very limited,” he said at a press conference. “We see code-share as a key point of our strategy.”

SAA’s agreement with Etihad coincides with a plan to return to profitability with the aid of cost cuts and more fuel efficient aircraft after posting a 1.36 billion rand ($151.8 million) loss for the year ending March 2012. The airline named Monwabisi Kalawe as CEO on April 19, as the “custodian of the turnaround strategy,” according to Minister for Public Enterprises Malusi Gigaba.

“We are seeing some green shoots appearing,” acting CEO Nico Bezuidenhout said in a interview. The airline has saved about 1.3 billion rand in the year ending March, he said.

As part of its fleet renewal plan, the airline will lease four Airbus A320s this year and 16 more by 2017, he said. The Airbus will replace older Boeing 737 and Airbus A319s, he said.

To contact the reporter on this story: John Bowker in Johannesburg at jbowker2@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

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