BRONWYN NORTJE: Why nosediving SAA no longer merits costly emergency landing
National carrier no longer Africa’s go-to airline as competition increases and market tightens
If the phrase "throwing good money after bad" had a genesis, the many bail-outs of South African Airways (SAA) would be it. The South African taxpayer has forked out more than R50bn in bail-outs for SAA since 1999 — enough, according to Business Leadership SA CEO Bonang Mohale, for the state to have bought Emirates outright. Yet the powers that be seem to think appointing a new "chief restructuring officer" will be the silver bullet to turn it all around. I don’t want to be a killjoy, but you don’t need a restructuring expert to know why SAA doesn’t make money and why it is unlikely ever to make money. The first and most critical reason is that, in the airline industry, costs have been rising faster than ticket prices. This isn’t a phenomenon unique to SAA but one airlines all over the world are struggling with.I am aware that arguments have been made for having a national carrier for reasons of economic development and that certain routes are crucial for the economy even if they ru...
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