SAA takes off on a wing and a prayer

An Airbus A319 jet owned by South African Airlines prepares to take off at OR Thambo International Airport, Johannesburg. Picture: EPA/KIM LUDBROOK

An Airbus A319 jet owned by South African Airlines prepares to take off at OR Thambo International Airport, Johannesburg. Picture: EPA/KIM LUDBROOK

Published Sep 25, 2021

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“On a wing and a prayer”, the saying goes.

Never was it more apt than when SA Airways took to the skies again this week, after being grounded about a year ago when its bank account ran dry.

The airline was only able to escape administration in April thanks to a R10.5 billion government bailout, and the resumption of flights with a scaled-back service (only six aircraft are currently being used) comes on the back of the announcement of the intended sale of a 51% stake in SAA to a private consortium.

Although most of the due diligence has been completed, the agreement has not yet been inked.

Public Enterprises deputy director-general Kgathatso Tlhakudi said there was no longer room for bailouts, and SAA’s finances would now be solely the responsibility of the airline’s proposed new owners, the Takatso Consortium.

However, given that the consortium is only putting in R3bn over three years, there is much doubt over whether the deal means the end of the taxpayer funding SAA's excesses.

While the Covid-19 pandemic brought the tourism and airline industries to their knees, it was merely another nail in the SAA coffin which was already being lowered into the ground when the virus made its presence known.

Decades of mismanagement and corruption meant SAA has not realised a full-year profit in a decade. In addition, it has not released financial reports since the 2016/17 financial year, so the true state of its finances is unknown.

The government is maintaining a stake in SAA, presumably because of its status as a strategic national asset, but it is an asset the country did without for the better part of a year, and can continue to do so, while private airlines showed the ability to weather the Covid crisis without government bailouts.

It is high time the government exited the airline business, which it has shown a remarkable ineptitude at managing, and concentrated on its core mandates.

The Independent on Saturday

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