Is it too late to save SA Airways? That is the question which has to be asked as the national airline looks as though it is about to crash.
Although not a case of the rats leaving the sinking ship, last week’s announcement by the Flight Centre group (which does as much as a third of the airline’s total business), that it would no longer sell SAA flights, was devastating news.
Flight Centre was forced into the decision because its insurance partner, Travel Insurance Corporation (TIC), had said it would no longer provide “insolvency insurance” for those booking with SAA. The ending of that business relationship meant two things for SAA.
Firstly, what revenue it did have the possibility of making through a hitherto loyal partner, disappeared.
Secondly, the news would have had a distinctly chilling effect on anyone doing business with SAA. After all, who – business or private person – wants to lose their money?
The sudden and dramatic deterioration of SAA is thanks to the week-long strike by unions, which cost the airline more than R300 million in lost revenue, plunging it further into the red and requiring an even bigger bailout from the government.
However, it is increasingly clear that the government is reluctant to throw good money after bad. So, it looks like there will be serious attempts to sell off SAA and merge it with a cash-flush and more efficient airline.
That makes logical financial sense – but those running SAA – as well as the government – have not actually thought logically on SAA for the past 15 years. Inevitably, whatever happens, there will be the very job losses the unions went on strike to protest – although union leaders themselves will be unaffected.
The other question posed by the SAA crisis is, then: Can we afford to allow the unions to continue like this?