BUSISIWE MAVUSO: Comair downed by competition, but no such pressure on Transnet
The gap left by Comair will be filled by competitor operators, which is something our freight transport system needs
Two events last week affecting our transport logistics framework shine a harsh light on the differences between a largely liberalised market and another controlled by a state-owned monopoly — Comair’s liquidation and Transnet’s credit ratings being placed on review for a downgrade by ratings agency Moody’s.
The main difference lies in the consequences. For shareholders of Comair these are financially devastating, as their investments will probably be written off in full. This is the worst outcome for investors who risk their capital in a company, but that risk is one all investors take and balance against the potential returns they could make...