Right on cue, soon after yesterday’s Daily Insider was distributed, courtesy of a copy provided by the Democratic Alliance we published the SAA’s Business Rescue Practitioners’ agreed plan for the troubled airline. The good news is SAA will live on. The bad news is taxpayers will need to kick in R21bn to keep it flying.
There are two ways of looking at this. The more popular approach, with the DA in the vanguard and supporters including redoubtable David Shapiro, is that taxpayers are being forced to throw good money after bad. These critics believe the national airline project should be abandoned and SAA allowed to collapse. They could be right. Then again, maybe not.
Having digested Ms Justice Ronel Tolmay’s judgement (apologies for yesterday’s Mr..) regarding the noxious Dudu Myeni, I’ve little doubt this airline is among the 85 year olds that should be helped to survive Covid-19. It can operate profitably, too, provided politicians stay away and SAA is allowed to appoint the right leadership (like former acting CEO and now Mango head Nico Bezuidenhout – read the judgement).
More to the point, it’s little use bleating about the R21bn because taxpayers were in for that much anyway. The bulk of the bailout is to settle loans which were Government guaranteed. The other big hit is R2bn each in working capital and retrenchments as half the staff are going to right-size the airline. It would have cost that R4bn were SAA to have closed down completely. I’m with Paul O’Sullivan on this. It’s the right call.
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Comment from Biznews community member Bruce H. Prescott:
Hi Alec
I fully agree with your statement that A. The airline should be government owned for various reasons, if not just historical, and government must not interfere with the management,  B, a competent, airline-experienced CEO must be appointed, not a government-appointed  cadre. Two very good examples are Ethiopian Airways and RwandAir which are both very successful, growing, government-owned and government does interfere with their airline management. Ethiopian expressed interest in SAA but the government did not want to let go or let outsiders know what was going on.
Kind regards
Bruce [ex-SAA Asst Director, Technical]