Almost too late for SAA to take off

Was Pravin Gordhan bravely whistling in the graveyard – the graveyard of yet another failed state-owned enterprise – this week when he said South African Airways (SAA) could survive without continuing to soak up billions in taxpayer money?

The collapse of the proposed buyout of the airline by the Takatso consortium will, hopefully, not be the end of attempts to sell off SAA because, frankly, getting the business into private hands would drastically reduce the opportunities for looting by ANC cadres, which is one of the main reasons it went bankrupt.

Had the comrades not viewed SAA as a cross between their own little piggy bank and executive jet transport for their worldwide jolly patrollies, perhaps the airline may have been able to reach a financial position where it was not a drain on the fiscus.

In total, SAA has lost more than R50 billion under the stewardship of the ANC government – but the mere privatisation of the company may not provide a miracle cure.

SAA’s biggest challenge is that it is an “end of hemisphere” airline – far away from the major markets of Europe, North America and Asia. For many years, strategists at SAA arrogantly refused to take this into account, believing they were the carrier that would “bring the world to Africa and take Africa to the world”, as one of its marketing slogans claimed.

While they sat back, fat and happy, other airlines with hubs closer to the markets – like Ethiopian Airlines and Kenya Airways – were busy eating SAA’s lunch. Ethiopian now has a massive fleet and makes big profits.

And now, it is almost too late to do anything about it. SAA needs a strong partner – preferably a major global airline player – to help sustain it. But it can never go back to what it was.