SAA bail out ‘not just’

COMAIR has reacted to
the news that Treasury has
approved a further R6,5bn
bail out to SAA, saying the
continuous guarantees to the
national carrier are creating
an uneven playing field in the
domestic market. The total
guarantees granted to the
airline sit now at R14,4bn.
“Comair has taken note of
the R6,5bn guarantee granted
to SAA and does not believe
it to be just nor in the best
interest of the SA taxpayer and
the domestic airline industry,”
the airline said in a statement.
The High Court legal
challenge to the R5bn
government guarantee
awarded to SAA in early 2013
is still pending
Rodger Foster, ceo of Airlink,
empathises with the view that
the new guarantee skewed
the market and inhibited the
development of private-sector
participants, but adds: “For the
time being the South African
economy depends on the
national carrier, with the caveat
that it should be a viable and
self-sustainable business.”
SAA is confronted by serious
challenges given how travel
patterns have changed
because of the proliferation
of airline hubs in the Middle
East (Emirates, Turkish,
Etihad and Qatar) and Africa
(Ethiopian, EgyptAir and Kenya
Airways), Rodger says. “SAA
should accept its new market
landscape for what it is and
look for the opportunities
rather than resist and counter
the threat. SAA will need to
pay careful attention to the
re-engineering of its business
to identify its new sustainable
business based on a suitable
and invulnerable network and
schedule that may be quite
different from what it does
today. SAA can be fixed,
and by all indications the
government, as the
shareholder, and management
are working extremely seriously
on an achievable turnaround
for SAA.”