The organisation is seemingly a financial black hole, with billions (roughly R50billion since 1999 in cash and guarantees) pumped in. There has been no financial return.
Finance Minister Tito Mboweni has stated that the airline should close shop because “it’s unlikely that you are going to find any private sector partner who will come join this asset”. Public Enterprises Minister Pravin Gordhan and the Free Market Foundation supported Mboweni’s position.
The national carrier crisis shows the lack of a national vision and strategy to turn SOEs into key drivers of the economy.
Why are state-owned national carriers in Ethiopia, Turkey, United Arab Emirates and Qatar thriving? Unlike SAA, highly skilled professionals with less political interference operate these airlines. No one doubts the skills and experience of SAA chief executive Vuyani Jarana’s; his record of accomplishment speaks for itself.
However, the rot has been deep. One is therefore shocked to hear cabinet ministers skate around systemic issues affecting SOEs.
SAA’s woes cannot be resolved without a broad national strategy that creates a conducive environment for SAA to thrive. Instead of wasting time uttering ill-considered views to appease markets, the ministers of finance and public enterprises ought to pay more attention to the former minister Barbara Hogan’s chilling testimony at the State Capture Inquiry or the Zondo Commission.
Turkish Airways, Ethiopian Airways and Emirates can be discussed as success stories. These have been managed differently, underlined by a vision, and accompanied by investment and tourism initiatives, professionalism, as well as governance structures that ensure government influence is passive.
SAA’s mandate speaks to the objectives of many ministries such as the departments of Transport, Tourism, Public Enterprises, International Relations and Co-operation. The situation, characterised by too many bosses, makes the possibility of a comprehensive vision difficult, made worse by the fact that board members are political appointees.
The developmental state is needed to turn this around to make it conjoined to the National Development Plan and to cut the deadwood.
South Africa needs the airline for many reasons. The primary ones here include high unemployment and the weak rand. After SAA virtually handed over its Cape Town-London route to British Airways, the latter made it profitable. The same can be said about many domestic airlines for domestic flights.
More needs to be done to work with other airlines within the Southern African Development Community, and to also enable ease of movement through the simplification of the visa process, which is cumbersome. All this is linked to the geographical disadvantage of the country. Being far removed from the centres of international commerce, the country can nevertheless draw lessons from New Zealand and Australia who have more or less the same affliction.
SAA cannot go at it alone. The national carrier must be kept in order to ensure South Africa’s dignity and standing in the world. There is an urgent need to restructure SAA. Employ competent people to manage it. Avoid appointing politicians’ friends and families onto the board.
There should be less government intervention. The state ought to create a conducive environment for SAA to succeed.
South Africa’s national self-image could use a jump-start. There is no better place to start than at SAA.
Monyae is a senior political analyst at the University of Johannesburg.