To my mind

Finweek English Edition - - Front page - BY MARC HASENFUSS march@fin­

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 ku­l­ – 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.

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