WEB HEADLINE: SAA, the airline we don’t really need
It is with dismay that I read that the Development Bank of Southern Africa (DBSA) had given South African Airways (SAA) a R3.5-billion bailout last week.
Of the R3.5-b, R2-b would be made available right away.
The national carrier is essentially in business rescue and has for years relied on government bailouts.
Taxpayers have forked out over R10-b over the years to keep the airline afloat.
The bailout comes at a time when SAA cannot even pay its employees their full salaries.
Additionally, it seemed to me as a case of robbing Peter to pay Paul.
There is no doubt in my mind that SAA will never recover.
Just last year, government committed to pay back R9-b in debts that SAA couldn’t afford to pay its creditors.
The carrier has been running at a loss for nine years straight.
Not only are they far too deep in the red.
Customers simply do not trust the carrier anymore, with endless delays and cancelled flights being the norm.
That’s not even mentioning the airline’s high prices.
I don’t know about you, but I’ve always skipped on SAA in favour of other low-budget airlines.
Last week, pictures emerged of half-empty flights, with rows of seats in economy and business class bumless.
I predict it will only get worse from here.
My biggest gripe, however, about SAA and the bailout they got from DBSA was I don’t understand how SAA fits into the bank’s development mandate.
DBSA typically funds projects like clinics, bridges and roads.
These are projects that have the potential to changes people’s lives.
Also, the bank is one of the few state-owned entities that are run well and made a profit last year.
Why potentially compromise that to rescue a sinking ship?
I also fear that money meant for better projects was diverted to help save SAA.
I highly doubt SAA will be able to pay the bank back, which could potentially put the bank in a precarious position.
SAA doesn’t have the ability to change lives.
Don’t get me wrong, I do feel bad for the employees who would lose their jobs if SAA were to shut down; however, these continuous bailouts are going to hurt us all in the future.
It is our tax money being used, how long before it is people’s pensions?
At the heart of the matter is, we really don’t need a national carrier.
It’s a prestige project that we could do without.
We’re not a first-world country, we’re a third-world country with rampant corruption, high youth unemployment rates and very little going right for us at this time.
We need to get our priorities straight and get the basics right before we aim higher.
As things stand, it is far too late for SAA to play catch-up.
The competition is tough, with customers spoilt for choice and better prices.
There is simply no reason why it needs to go on.
At this point, I think the best thing to do would be to sell SAA’s assets and pay off their creditors.
There is nothing in the future that suggests a radical change in how the airline is managed.
Years of bad leadership coupled with political interference and a huge debt burden means realistically there’s no chance of survival for the airline.
Let’s cut our losses and bid SAA farewell.
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