State duties hurt SAA’s bottom line and tourism

Published Nov 6, 2013


SAA is at a major disadvantage compared with airlines that are not state-owned because it is obliged to carry out the government’s policies at the cost of operating at a loss.

It is obviously to this country’s advantage that it should be the dominant provider of airline access to countries within Africa, and there is no time to be lost when foreign airlines are increasingly coming in.

But as Erik Venter, the chief executive of domestic and regional airline Comair, pointed out, these routes were unlikely to be profitable as costs at most African airports were unacceptably high, while the incomes of the growing African middle class were not yet at the level at which many of them could afford to fly.

Not only that, but SAA, to relieve the burden of its high costs, is entering into codeshare arrangements with airlines from countries with stronger currencies, which means that it gets only a share of the fares paid by the passengers it carries on their behalf.

The national carrier’s plight is made worse by the fact that to use its fleet on loss-making routes it has withdrawn from many intercontinental routes it served in the past, particularly to Europe, which is still our main source market for tourism.

Its decision to withdraw its service between London and our top destination of Cape Town drew protests from the tourism industry, but could have been justified by the fact that European airlines have moved in to fill the gap.

This is unlikely to happen with a decision it has apparently reached to withdraw its service between Buenos Aires and Johannesburg, which – according to the tourism industry – will hit both Cape Town and the Eastern Cape


Last month a group of tour operators from Argentina estimated that the value of tourism to South Africa from their country was more than R400 million a year.

The Western Cape MEC for Finance, Tourism and Economic Development, Alan Winde, has requested an urgent meeting with SAA’s new chief executive, Monwabisi Kalawe, to discuss the matter and put forward the case for retaining the route. He said yesterday that Argentina was one of South Africa’s fastest-growing tourism markets, with arrivals from that country increasing by 26.8 percent between 2009 and last year.

SAA’s move was a major setback to the promotion of increased trade between South Africa and Argentina.


The independently owned Hotel Le Vendome in Sea Point, once one of the city’s most popular, particularly with business visitors and for functions, was temporarily closed when it was hit by a steep drop in demand following the Soccer World Cup in 2010, which left Cape Town with an over-supply of five-star hotels.

Now the 143-room hotel near the seafront is being prepared for a re-opening in six months under the management of the Carlson Rezidor Hotel Group, one of the 10 largest hotel groups worldwide

. Rezidor already has four other hotels in Cape Town and others in Johannesburg.

Andrew McLachlan, Rezidor’s vice-president of development for Africa and the Indian Ocean islands, said South Africa was one of the few markets in Africa offering real opportunity to convert existing hotels, which were either independent or operated by competitor brands.

He anticipated doing more conversion hotel deals in South Africa than building new ones.

Unlike Hotel Le Vendome, which has not been sold by its owners in the United Arab Emirates, the five-star 15 On Orange, which remained popular with business travellers, including some in the film industry during the period of over-supply, has changed hands. It has been bought by Blend, a property group focused on development and investment in the office, industrial and retail sectors.

But it will continue to be managed by the Protea Hospitality Group and remain in its African Pride de luxe brand.


It is telling how it is the little things that resonate. A smile from a stranger can make a day seem brighter, random acts of kindness or an unexpected courtesy from another motorist can restore one’s faith even in the face of the stupidity, selfishness and hostility that confronts us as we step out of our homes into Johannesburg’s mad mess.

The headlines don’t help either. Forget the complaints from venal and self-serving political leaders that stories exposing their dishonesty, corruption and immorality should play second fiddle to sunshine news about some subsistence farmer being uplifted with a gift of a tractor and some long overdue attention.

And neither does polishing the obvious with patriotism with an eye on next year’s elections do us any good.

The headlines about another criminal atrocity, rampage, rape, assassination or political scandal have to be there, but they do nothing to uplift the spirit.

So when I stopped at a Greenside garage to pick up a Sunday Times, I paid little attention to the headline shouting about another Gupta-President Jacob Zuma scandal alleging that a coal mine in Mpumalanga was getting away with breaches of environmental, mining and labour laws.

As the young cashier handed me my change she asked what I thought about it. “More of the same,” I shrugged, affecting indifference.

“Nothing is going to change until the country comes to its senses,” I said.

Then the cashier’s little telling moment. “But wouldn’t you want to be a powerful politician, too? I would, then I could do anything I wanted to and I wouldn’t have to answer to anyone.”

I shuffled off without replying. There it was, the true depth and damage caused by corrupt leaders: If they can lie, cheat, steal and run roughshod over the law – why shouldn’t every one else? They want to.

Edited by Peter DeIonno. With contributions from Audrey D’Angelo and Peter DeIonno.

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