Let SA Express fly free
IT IS excellent news that SA Express, the state-owned regional airline, has managed to turn a very small profit in the 2012-13 financial year. Given the financial chaos at the company only a year ago, the turnaround offers Public Enterprises Minister Malusi Gigaba an opportunity to nurture it in preparation for a sale.
Mr Gigaba has for various reasons wanted to merge the three state-owned airlines (South African Airways, Mango and SA Express). SA Express’s unexpected ability to turn a profit muddies the water somewhat.
Principally, Mr Gigaba wanted to avoid repeated trips to Parliament to beg for bail-outs. It makes for bad headlines and it is much easier if all three are merged. And, to be fair to Mr Gigaba, who had to call in the auditor-general to attempt to make some sense of the mayhem in SA Express’s books last year, even mere months ago it looked likely that the airline would need significant help from the state.
Mango does not announce its results separately, but given the demise of 1time last year, it is clear that Mango will have benefited from the loss of 2-million seats of capacity that went with it.
But the fact that SA Express can turn a profit might mean such a merger is unnecessary practically, and indeed offers the state a giltedged opportunity to divest itself of what is clearly an asset that can run profitably, and focus on getting SAA straightened up and flying right.
The first problems such a merger might encounter are the differing labour regimes. SAA employees, not least the pilots, are very well looked after, and the incoming staff from SA Express might feel they have the right to the same benefits, something that would be sure to pitch the entity back into the red.
In addition, SA Express ought to be left free to grease the wheels of the economy with commercial efficiency by getting busy people to where they need to be. It serves a crucial purpose, and need not be encumbered by SAA’s costly labour regimen nor, indeed, any so-called developmental agenda. Mr Gigaba and management are to be congratulated on the airline’s turnaround. While it is true that one swallow does not a summer make, yesterday’s news should inspire Mr Gigaba to carry on the good work, keep the company away from the general SAA morass, and, in time, let this bird fly free.