Aloota con­tinua

Un­bri­dled ac­cess to soak­ing the tax­payer the mak­ings of dis­as­ter

Finweek English Edition - - Nothing Sacred - STEPHEN MUL­HOL­LAND stephenm@fin­

NO DOUBT THABO (“in­formed by the im­per­a­tive”) Mbeki would be among those re­luc­tant to see the pri­vati­sa­tion of SA Air­ways, as he has life­time rights to a busi­ness class seat (only one?) to any­where and no longer has au­to­matic ac­cess to the pres­i­den­tial Boe­ing Busi­ness Jet. Trade unions might also ob­ject, as the State is usu­ally less in­tran­si­gent than pri­vate share­hold­ers who lack ac­cess to the bot­tom­less pit of tax­pay­ers’ money.

It would seem that, as a mat­ter of prin­ci­ple, the State has no pro­found ob­jec­tion to the pri­vate sec­tor run­ning SAA, or at least hav­ing a large stake in do­ing so, as it did take in the late Swis­sair as a part­ner, a deal un­done by the bank­ruptcy of the Swiss.

SAA has been an enor­mous drain on the fis­cus. We can’t seem to find any­one who can man­age it ef­fi­ciently, even when we em­ploy some ob­scure Amer­i­can who, af­ter a cou­ple of years of the high life at our ex­pense, soaked us for a quar­ter of a bil­lion rand – more money than he had made col­lec­tively in his en­tire ca­reer.

Soc­cer, it seems, is run on the same lines as SAA, with some (white) Brazil­ian brag­ging he’ll make in 30 months here what it would take him to earn in 30 years in his home coun­try. And he can’t speak English or any other lan­guage un­der­stood by his Bafana Bafana play­ers. As they say, aloota con­tinua. To re­turn to the tra­vails of SAA: let it be granted that there have been el­e­ments – such as the oil price and the de­par­ture of tech­ni­cal and other staff for po­lit­i­cal rea­sons – that have been be­yond its con­trol. How­ever, in a na­tion like ours that’s so short of ex­pert man­age­rial staff surely it would make sense, in the ab­sence of pri­vati­sa­tion, for the man­age­ment of SAA to be out­sourced by its share­holder, the Gov­ern­ment?

What does Gov­ern­ment know about run­ning an air­line? As much as I do about brain surgery is the an­swer. And one sus­pects that new Pub­lic En­ter­prises Min­is­ter Brigitte Mabandla, who was taken to task by Judge Chris Ni­chol­son for in­ter­fer­ing in the af­fairs of the Na­tional Pros­e­cut­ing Au­thor­ity, doesn’t know any more than I do.

Sim­i­larly, Khaya Ngqula, CEO of SAA, brought to his po­si­tion zero knowl­edge of or ex­per­tise in the busi­ness. He’s learn­ing on the job at our ex­pense and he con­tin­ues to hold his hand out to us for more and more bil­lions to keep the air­line fly­ing.

A pre­dictable re­sult of all of this vast and waste­ful ex­pen­di­ture has been the in­abil­ity of the pri­vate sec­tor (with ex­cep­tions) to com­pete and we have thus seen pri­vate op­er­a­tors such as Flites­tar, Sun Air and Na­tion­wide all fail in the face of tax­payer-funded com­pe­ti­tion, in­clud­ing the newish Mango op­er­a­tion.

Co­mair, which runs ku­l­, sur­vives and re­cently an­nounced its 63rd suc­ces­sive year of op­er­a­tional prof­its. Surely it would make sense for Gov­ern­ment to tap into this home­grown reser­voir of ex­pe­ri­ence and tal­ent to en­able SA to build a fi­nan­cially vi­able and ef­fi­cient na­tional car­rier? Per­haps Mabandla, un­hin­dered by the ri­vals and jeal­ousies of the past, can knock some heads to­gether and pro­duce san­ity and ex­cel­lence out of may­hem. Com­pe­ti­tion is im­por­tant, but when one of the play­ers has ap­par­ently un­lim­ited ac­cess to soak the tax­payer with no ques­tions asked then we have the mak­ings of dis­as­ter.

Fur­ther, as is the case here, when the State player has con­sis­tently demon­strated its in­abil­ity to per­form, it makes no sense to per­se­vere when other op­tions are avail­able. It was War­ren Buf­fett who said that run­ning an air­line was the sin­gle most dif­fi­cult busi­ness he knew. If you ac­cept that and take into ac­count the suc­cess, for ex­am­ple, of Qan­tas against the steady de­cline in the num­ber of state-owned air­lines around the world then it makes sense to tap into the ex­cel­lence avail­able on our very doorstep.

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