EDITORIAL: State role in SAA won’t allow take-off
There is only one way to get the airline to flourish, and that is to free the government’s stronghold
Business is, for the most part, not rocket science. Take an airline: At the heart of it, you need the right planes on the right routes, with a low enough cost base that you can offer seats to customers at competitive prices. It sounds easy enough, but billions of dollars in shareholder money have gone up in smoke over the decades as entrepreneurs — and governments — failed miserably at getting these basics right. SAA is one example where government is throwing good money after bad. Some state-owned airlines do manage to survive and thrive, but very few of them do so without significant state help, including by offering regulatory protection against competition and cross-subsidisation from airport services. This used to be the case in SA; Ethiopian Airlines is a current example. Some also play an important developmental role, with governments successfully using the airline to boost their tourism sectors, as is the case in Mauritius.
At SAA, much of the ire about what appears to...