Exxaro Sells Jetliner as Coal Company Ramps Up Cost Cutsby
Exxaro Resources Ltd. has sold aircraft it owns including a Boeing 737 in an effort to cut costs as the mining company, which mainly operates in South Africa, takes measures to survive a downturn in mineral prices.
The South African miner has "in recent times implemented various cost savings initiatives," including mobile phone usage, spending on travel and entertainment and the sale of the Exxaro helicopter, documents related to job cuts being considered by the company show.
"Exxaro is a decent sized company, but I didn’t know they had" the plane or the helicopter, Peter Major, a mining analyst at Cadiz Specialized Asset Management in Cape Town, said by phone. "Hopefully, somebody’s done an analysis and said we’re going to save money selling this, but if they figure that out, then who did the analysis to say we’re going to save money buying this?"
Mzila Mthenjane, a company spokesman, didn’t reply to an e-mail seeking comment about the aircraft.
Standard models of 737 can carry about 150 people and fly for three to four hours. The Exxaro plane is more than 36 years old.
The company is considering 565 job cuts, the documents show.