‘SAA is a dinosaur that belongs in the past’

2013-10-21 00:00

SOUTH African Airways (SAA) needs at least R6 billion to finance its turn-around strategy, but the amount may be higher.

The carrier is currently negotiating with the Treasury to finance the plan, which is preventing SAA from tabling its financial statements for the 2013 book year in Parliament.

The carrier in the past decade lost about R12 billion, of which the main portion was lost to hedging. This year a new, all-inclusive, turn-around plan had been finalised, which is currently being put into practice. The plan entails buying new, more fuel-efficient planes.

SAA spokesperson Tlali Tlali said the carrier had already invited manufacturers to submit expressions of interest. Any manufacturer of suitable aircraft could submit tenders.

Tlali did not want to reveal the specifications contained in the invitations, but SAA will probably choose between the latest aircraft from Boeing and Airbus.

The Free Market Foundation said instead of buying new planes, SAA should be sold on a public auction.

“The SAA is a dinosaur that belongs in the past,” said Temba Nolutshungu, director of the foundation, in a speech to the Airways Association of Southern Africa (AASA) on Friday.

Nolutshungu said there was no reason for the government to still own its own airline. He said SAA had already received and wasted billions of rands and chances were that the same would happen in future. He quoted Einstein, who defined madness as repeating the same action over and over in the hope of a different result.

Willie Walsh, CEO of International Airways Group (IAG), also said at the AASA congress that the time for state-controlled airlines had ended.

Walsh said airlines were struggling because the industry was so fragmented. He said governments kept on subsidising their national carriers, which should instead close or merge with others, at a huge cost to their taxpayers.

Walsh said governments should just create a framework in which airlines can function.

Rodger Foster, head of Airlink, said while he did not not agree with all the ideas of the Free Market Foundation, he agreed that the 220 registered carriers in Africa were too many.

“Almost every country has its own airline. This is unsustainable,” said Foster.

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