SAA alliance jockeys for position

THERE is conflicting news on the future of debt-ridden SA Express Airways. The latest news is that SA Express will be merged into SAA. Initially SA Airlink was keen to purchase SA Express, but SAA and/or its government-owned shareholder, Transnet, apparently rejected this proposal. There was then a counter-offer by SAA/Transnet to purchase SA Airlink and to merge both brands into SAA. TNW understands from aviation observers, however, that the proposal was rejected by SA Airlink because SAA/Transnet underestimated SA Airlink’s price, basing it purely on the value of its assets, not taking into account goodwill and brand value. SAA apparently could not afford the airline at that (unnamed) price. According to latest reports, the talks are off. Yet a source close to Transnet told TNW this was not true. He said SA Airlink had been excluded, leaving only SAA and SA Express discussing their mutual future. The Sunday Times recently reported that SA Express had a debt of R700m. TNW has subsequently learned that SAA and Transnet will find some way to ring-fence the debt before the national carrier acquires the ailing airline. SA Airlink has perfected the feeder airline concept and is believed to be a thorn in the flesh of SA Express. (Mark Gray)