Even though SAA management did not know what its accounts looked like for years, they knew roughly how much they lost for every day workers were on strike and the planes did not fly.
I wonder how much Eskom loses every day there is load -shedding. Here are some points to consider in this regard:
- There is no reduction in interest payments, which exceeded revenue in 2018.
- Revenue is reduced because those who pay are shed just as those who don’t pay.
- Without differentiated pricing, diesel-fuelled electricity generation is loss making, and from announcements, it seems load-shedding is preceded and/or mitigated by “tanks of diesel” going up in smoke.
- Unscheduled maintenance implies maintenance costs over and above those planned (which are hopefully budgeted for), and urgent and expedient solutions almost always cost more in the medium term.
SAA’s loss per day was about R50m. I wonder what it is for Eskom? More or less than R50m per level of load-shedding per day? At SAA, the R50m per day was the direct cost. The indirect cost, for example lost future bookings, cost the airline its future.
Economists have linked short-term GDP output declines to load-shedding, and electricity production to long-term economic growth. What would the second-order cost be? Should we add a zero?
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