The new SAA might have some trouble flying

It’s extremely rare for governments to make major announcements late on a Friday, just as everyone is settling  into a weekend stupor.

Either war has broken out or, more likely, it’s some devious politician trying to slide something past our TGIF- addled brains.

So Public Enterprises Minister Pravin Gordhan’s Happy Hour news on Friday regarding the fate of SA Airways  (SAA) deserves the scepticism that is slowly overtaking the relief with which it was met.

At first sight, what not to be happy about?

Not only had Gordhan found a consortium to untangle the albatross of SAA from the taxpayer’s neck, but these  nice gentlemen are giving us some magic beans for the privilege of doing so. And not just a handful. A cool R3  billion of beans.

Sadly, in the thin, mean light of a Monday morning, it became clear that the deal wasn’t quite the financial coup  that the Marxist Titan of Wall Street pitched it as.

First, they weren’t actually buying SAA; the R3 billion was going to be “put into” SAA over three years, as the  consortium’s chief executive Gidon Novick carefully phrases it. Second, the taxpayer wasn’t actually getting rid of SAA as a single rusting hulk but only the bits that conceivably can be knocked into aeroplane shape; all its  considerable existing liabilities remain the Treasury’s responsibility.

The Takatso consortium can be more accurately described as a suitor than a buyer. It still has to perform financial due diligence – the commercial equivalent of examining the bride-to-be’s dowry offering and sniffing about the poor quality of the linen.

SAA’s last set of audited financial statements dates back to 2017, aptly the year that the phrase “state capture”  entered our vocabulary with the Gupta leaks.

Aviation experts I spoke to were uniformly pessimistic about the long-term viability of SAA.

The obvious problem is funding. Airlines burn money and when the fleet that you are inheriting is old and stale,  there are cost implications.

In the time-honoured fashion of those heading towards bankruptcy, SAA has sold off the most modern aircraft in its fleet. While it can enter into a so-called ACMI (aircraft, crew, maintenance and insurance) arrangement, this is the startup and budget airline route, not quite the style of a national carrier.

However, it would mean outsourcing abroad the flying crew and maintenance functions.

That would sit uneasily with Takatso’s promise to prioritise transformation, especially since the SAA workforce is  proportionately, personto-plane, the most over-staffed in the world.

Another problem is destinations. While SAA has been grounded, Qatar, Emirates and Turkish have been among those eating into its most profitable international destinations. Regionally, so too have Kenya, Ethiopia and  Airlink.

That leaves domestic travel, where the market is crowded and the customers jaded.

Despite the expert consensus that the Takatso deal won’t fly, or at least not for long, there was also agreement that if anyone could achieve the apparently impossible, it is Novick.

It will help that the other leg of the consortium is Harith General Partners, chaired by former deputy finance  Minister Jabulani Moleketi.

Moleketi also once chaired the Public Investment Corporation, which holds 30% of Harith. Whatever the wheels-within-wheels gearing for liftoff, the final decision of whether to fly with it lies with the public.

A TourismUpdate poll this week found 16% of respondents would buy tickets in the relaunched SA, 64% not, and 20% undecided.