SAA – sink or save?

Although our national airline, South African Airways has been a bad, bad boy this year, Santa er… government still dished out an additional R1.6-billion for the beleaguered parastatal in its 2009/10 budget.

And the giving doesn't stop there, no sir! SAA's board of directors came under heavy criticism after it was revealed that they were literally taking home the bacon. Of the R65-million net profit SAA made during its 2006/7 financial year, more than half that money (R37.64-million) was paid out in performance bonuses. Surely you actually have to perform to receive a performance bonus?

Even (recently) axed CEO, Khaya Ngqula had his piece of the pie as his earnings topped an estimated R20-million during his four-year tenure as head of the airline. It seems like a lot of taking and a lot less giving from SAA's side.

According to Public Enterprises Minister Brigitte Mabandla, our national airliner has received financial support, including cash injections, totalling more than R12.054-billion since 2004, this excluding the restructuring costs of R1.345-billion. And it is still begging for more.

Time is ripe to look into privatising

Meanwhile the parastatal's losses rallied to around R13.74-billion for the period from 2002 to 2008, while the global economic downturn, coupled with higher fuel prices and heavy interest on its crippling debt, are seen to still plague the airliner during the current financial year.

Please excuse my business ignorance, but surely a company that ran at an annual loss of around R1-billion in 2008 and R833-million in 2007 would be a lost cause? Surely the time is ripe to seriously look into privatising our money-sucking national carrier? Privatisation has been proven time and again to be a sure-fire recipe for success.

SAA has a legacy of failures. This was only aggravated by the latest drug-trafficking scandal that caused the airliner much damage – and perhaps even more ticket sales. With around five airlines flying domestic and international flights to and from South Africa, it really makes one wonder whether there is still much need for the state-owned airline.

SAA could look at a more lucrative future

Opposition political parties have on numerous occasions called on government – its biggest shareholder – to privatise SAA, but without any luck. If the privatisation of other aviation giants such as British Airways, Kenya Airways and Air Botswana is anything to go by, SAA could be looking at a more lucrative future. SAA could make a killing through listing, while other options such as BEE deals could also prove rewarding.

Of course, such a privatisation will require the business to get rid of all inept staff and the appointment of a capable and experienced CEO would be vital for survival.

The South African route is a profitable one and should SAA fold, I am certain there are many carriers, national and international which would jump at such an opportunity. Our national carrier is an albatross around South Africa's neck, an embarrassment not only to our aviation industry but also to our country.