SAA FIASCO CONTINUES

Though the national carrier can’t match its rivals’ fares in Africa and elsewhere and is a huge financial drain, government will not entertain thoughts of privatisation, saying job losses would be too severe

number of flights from Johannesburg to London’s Heathrow, and in 2017 reduced the frequency of flights to some African capitals.

Public enterprises minister Pravin Gordhan’s office has indicated to the Financial Mail that a merger between SAA and SA Express is on the cards as part of the broader attempts to restructure the airline and that it will be disclosed soon — after legal, governance and cabinet processes.

It’s clear that moves to privatise are not under way.

SA Express, however, has also proven to be a loss-making entity. The airline requested a postponement of the publication of its March 2017 results.

Auditor-general Kimi Makwetu’s report on SA Express in the 2016 year spelt out concerns around governance, leadership, accounting problems and legal matters.

Absa senior economist Peter Worthington says government hasn’t taken into account that the aviation industry has changed, with the emergence of big players in Africa.

“SAA as a travel hub into Africa doesn’t work any more.”

African players including Egyptair, Ethiopian Airlines and Kenya Airways are taking market share on the continent while international players including Qatar Airways, Etihad and Emirates pose an even bigger threat.

With SAA lacking a competitive edge against the other players, South Africans are even less likely to use the national carrier.