SPECULATION is building
in the industry that SAA
is considering Etihad
Airways as an equity partner,
with recent happenings
adding fuel to the fire.
Late last month, at
the re-launch event of
SAA’s Voyager loyalty
programme, acting ceo Nico
Bezuidenhout, said SAA
had embarked on a 90-day
action plan that would
help return the airline to
commercial sustainability.
This is in line with its Long
Term Turnaround Strategy,
‘Gaining Altitude’.
Nico was vague about
the “six-step” plan,
saying only that the first
step was to look at the
“solvency and liquidity of
the business”, second its
“operational interventions”,
third “compliance”, fourth
“governance structures”,
fifth “reorganising assets”,
and sixth “communicating
these changes”.
The three-month strategy
follows SAA’s unsuccessful
application to government
for a ‘going concern
guarantee’, City Press
reported on November
30. The article said SAA
desperately needed the
guarantee to raise funding.
Other options included
finding investors to take a
stake in SAA, it said.
Earlier in November,
Minister of Public
Enterprises, Lynne Brown,
said she would encourage
SAA to find a ‘strategic
equity partner’. Etihad has
since been recognised as
a viable partner for SAA on
popular aviation forums such
as Avcom.
At the time of going
to print, SAA and Etihad
announced they would hold
a joint media conference on
December 9 to announce
the expansion of the
strategic partnership
between the two airlines.
An aviation source,
who preferred to remain
anonymous, told TNW an
equity partnership between
SAA and Etihad could
prove to be problematic as
South African law restricted
foreign ownership to 25%.
Historic evidence shows
that Etihad usually aims for
a much larger ownership
percentage for its equity
stakes. Etihad also tended
to negotiate quite strong
management contracts
whereby they could steer the
turnaround strategy of the
ailing airline, which would
also be problematic under
the current South African
legislation, he said.
Is Etihad buying a stake in SAA?
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