What will actually save ailing SAA

Although the late and often unlamented public enterprises minister, Pravin Gordhan, has exited the government building, with multiple parastatals crashing and burning in the background, the national airline, South African Airways (SAA), is still parked on the apron, begging bowl in hand.

This after the questionable transaction where SAA would have been acquired by the Takatso Consortium and the exit of the airline after three years in business rescue.

The airline’s chief commercial officer, Tebogo Tsimane, cautioned recently that the airline needs an equity partner to save it.

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According to him, the government – which is SAA’s shareholder – has said there will be no more taxpayer bailouts.

In other words, the airline will have to be able to stand on its own two feet financially. It appears that its executives have been frantically casting about trying to find such an equity partner.

According to Tsimane, some of the “financiers” SAA has spoken to “will actually come to the party and say, yes, we agree with what you are doing”.

We must wonder though, whether that is not wishful thinking or whistling in the graveyard of bankruptcy to boost the airline’s spirits…

Earlier this year, National Treasury reported a SAA loss of R771 million in the airline business and R51 million in the red at SAA Technical.

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Whether there is an investor prepared to take on an entity almost brought to its knees by government interference and corruption is also problematic, to be kind. The basic problem with SAA is that it should only be an airline focusing on its local market.

Because it is what is known in the sector as an “end-of-hemisphere airline”, it will always struggle to compete with other carriers which are closer to the European, North American and Asian markets.

If SAA gave up those dreams of glory, it might find a prospective buyer.