More on SA merger in march

MORE news on the
possible merger of
the three state-owned
airlines, SAA, SA Express and
Mango, is expected by March.
The government recently
appointed consultancy
company, Bain & Company,
at a price tag of R12,1m
to ‘assist government in
undertaking a comprehensive
assessment of all options
before reaching a decision
on the optimal ownership
and corporate structure for
the state-owned airlines’. The
corporatisation of Voyager
and Cargo, the integration
of SAX under the holding
company structure; the
integration of the technical
divisions of SAA, SAX and
Denel; the sale of South
African Travel Centre (SATC)
and the retention of SAA’s
shareholding in SA Airlink
are some of the elements
regarding the restructuring of
state-owned airlines currently
being assessed. Treasury
says the study is expected
to be completed by the end
of March.
Industry players say it is
too soon to tell whether Bain
& Company will advise a
merger for the three airlines
or whether they will instead
suggest that they operate
under a common holding
company.
Chris Zweigenthal, ceo
of Aasa, says: “I believe
that Bain will look at many
options, one of which could
be a holding company, but
there are other solutions.
I think it is too early to
speculate on what the
ultimate implementation
will entail.”
In October last year,
Minister of Public
Enterprises, Lynne Brown,
announced that SAA, SAX
and Mango could see the
introduction of a private
equity partner owning up to
a 25% stake in the three
airlines. At the time, the
Minister could not give
details on how the airlines
would be combined but said
it could either be through a
merger or through a common
holding company.
Another consulting firm,
Seabury, has also been
appointed to advise the SAA
board on the restructuring
process, on growing revenue
and on a long-term business
plan. The airline previously
engaged the services of
Seabury in 2007.