FLIGHT PLAN
How SAA could be saved
Instead of bringing “the world to Africa and taking Africa to the world”, SAA has become a national nightmare. It is endlessly mired in inefficiencies, corruption, bail-outs and sheer incompetence. Upon assuming power in 1994, the ANC government rightly perceived state-owned enterprises (SOEs) as a route to a better life for all.
However, as ANC veteran Ben Turok wrote recently, “there was obviously no possibility of the government taking over the heights of industry, or indeed managing large sectors of the economy. It had neither the political muscles nor the capabilities to do that.”
It therefore comes as no surprise that finance minister Tito Mboweni has boldly stated that the airline should close shop because, in his view, “it’s unlikely that you are going to find any private-sector partner who will come join this asset”.
The idea of privatising or shutting down SOEs is diametrically opposed to the long-held position of the ANC and its alliance partners.
Public enterprises minister Pravin Gordhan and quite a lot of communists in the government, such as minister of transport Blade Nzimande, appear unaware of the role of SOEs in the national democratic revolution. The views of these ministers are more in sync with neo-liberal institutions such as the Free Market Foundation than with their own party ideology.
There has been a failure to seek a national vision and strategy to revive SOEs as the main drivers of the economy. National carriers in Ethiopia, Turkey, the United Arab Emirates and Qatar provide examples of state-run heights of industry.
In these countries, the state creates a conducive environment for highly skilled professionals to run SOEs with less political interference.
SAA CEO Vuyani Jarana is highly skilled and experienced and has an impressive record, but the rot at SAA is too deep for one individual to clean up. The SAA crisis requires a broad national strategy that speaks to Africa’s agenda. The government should take the hard decision after the 2019 elections to restructure SOEs to boost small and medium-size enterprises, drive innovation and ease youth unemployment. The Zondo commission has lifted the lid on how highly skilled people such as Sipho Maseko were sidelined at Transnet in favour of those with dubious records.
There are endless stories of SOEs that were on the verge of collapse but were restructured and returned to profitability. SAA can learn from Telkom, which turned itself around. The mandate of SAA should be revised to be in line with national and continental priorities. Currently, the SAA mandate is wobbly and it reports to too many ministries. In the past 10 years, it has had some of the worst board members, hand-picked by politicians. It has taken business decisions that were not thought through, in order to satisfy politicians instead of customers.
After SAA virtually handed over its Cape Town-London route to British Airways, the latter managed to make it profitable. The same can be said about other routes. British Airways has even expanded its global routes by opening a direct flight from Durban to London.
More could be made of regional routes to compensate for the fact that SA is a small market. More needs to be done to work with other airlines within the Southern African Development Community, and to enable ease of movement through the simplification of the visa process, which is cumbersome.
All this is linked to SA’s geographical disadvantage. Being far removed from the centres of international commerce, the country can draw lessons from New Zealand and Australia, which have more or less the same affliction. Understanding Wellington and Canberra’s experiences can be the much-needed impetus for some new thinking.
The long and the short of it is that SAA cannot go it alone. The national flag must be kept flying so as to ensure the dignity and standing of SA in the world.
There is an urgent need to restructure SAA comprehensively. First, employ competent people with experience in the field to manage it. Avoid the appointment of friends and family members of politicians to the SAA board. There should be less government intervention, allowing SAA to be run by technocrats. The state ought to create a conducive environment for SAA to succeed, including having a clear national plan supported by all stakeholders.
The Airports Company SA, municipalities and safety and security bodies need to co-operate on a national plan to make airports safe environments. SA’s national self-image could clearly use a jumpstart. There is no better place to start than SAA.
Monyae is a senior political analyst and director of the Centre for AfricaChina Studies at the University of Johannesburg