To my mind
DO WE WRITE things off too quickly? Things – even when the odds are heavily stacked – can turn around. Watching the Proteas sending the hapless West Indian bowling attack to all parts of the St George’s Cricket Ground last Tuesday certainly provides proof. A few days earlier one might have been forgiven for writing the Proteas off as inept chokers with zilch chance of making the World Cup Cricket semi-finals. The match against lowly Bangladesh showed a team petrified by a challenging score. And they capitulated in the most pathetic fashion imaginable.
But the boys – especially our dashing “crampion” AB de Villiers – got on to the front foot and put the campaign back on track. I only trust by the time this editorial is published the Proteas haven’t succumbed to another slump in form and confidence.
Anyway, my bigger point is really about our national carrier SA Airways, which – like our cricketers against Bangladesh – looks in serious risk of taking a beating by unconvincingly playing the soft options in the face of stiff challenges. SAA is a business that’s in need of a radical corporate overhaul if it’s to attain acceptable levels of profitability in the medium term. Measures have been proposed, but there are serious doubts that those actions will have the desired effect.
Reports suggest that one of the key SAA initiatives to cut costs will be to curtail onflight services. That’s got to be the daftest idea for SAA at this delicate juncture.
With perennially profitable BAComair – and its low cost subsidiary kulula.com – gnawing away at SAA’s market share the last thing the national carrier wants to do is make flying any more of a discomfort. I don’t doubt for a second that those savvy operators at Comair will not hesitate to cash in on SAA’s curbed horizons.
Sure, if SAA can whack down ticket prices, the hacking away of frills may be worthwhile. But whether the frill-trimming will allow SAA to pitch more competitively on pricing remains to be seen – especially if the airline is increasingly competing with the budget flyers.
Frankly, SAA’s service curtailing proposals and other cost-cutting initiatives are tantamount to playing a “nurdle’ to leg when the run rate is a demanding 10 an over. It’s simply not enough… and without radical corporate action SAA is looking increasingly like a write-off.
I believe that SAA, which not too many years ago was profitable, requires a new operating platform – a platform separate from Government ownership. Finding a willing buyer (with deep pockets) for all or a serious part of SAA would be the ideal starting point. Consider what a corporate wizard like Brian Joffe might do in the unlikely event he got his hands on SAA?
If there’s an obsession in Government to retain a national carrier it could well become a very costly obsession with you and me (as obedient taxpayers) footing the bill.
Maybe SAA – in its current fragile financial state – won’t fetch top dollar. But surely Government (and we should be encouraged by the utterances of the Public Enterprises Minister in Business Day last week) can’t allow the enormous drain on State coffers for much longer. Who knows whether next year will bring another request for a bailout?
At this point we’d urge Government to seriously consider selling the damned thing and not pussyfoot around what’s increasingly becoming an untenable situation. Or are we writing off SAA too quickly? > CHANGES AT THE TOP COLLEEN NAUDÉ, currently deputy editor of Finweek, has been appointed Executive Editor of the magazine with immediate effect. It’s a deserved promotion for Colleen, who has been a pillar of strength at Finweek (and its previous guises) for many years. She brings valuable experience, unflagging dedication and superb editorial skills to Finweek.