Why shutting down SAA could destroy South Africa: Ramaphosa

[eXisor]

There's no actual reason you can point to as to why it can never be profitable again... only sentimental "we've been trying to fix this for 10 years already and it doesn't work..." Which isn't true - we haven't actually tried to fix the airline. We just used "SAA needs fixing" as an excuse to put more corrupt pawns into management - which only accelerated the downward spiral.



You make a good point. For SAA to become profitable we'll need to rid it of corruption and mismanagement. Having said that, SAA and the other SOEs will drag this country down into the ground with it if we don't. The issue is a lot bigger than "ah, just close SAA to stop the bleeding already." If SAA doesn't make a comeback, the world, as we know it, will end

Your solution requires integrity and skills that the ANC, en masse, has a proven record of not possessing. Given some other government in some other country, sure, we can fix it and all will be well.
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[Idiosyncratic]

Your solution requires integrity and skills that the ANC, en masse, has a proven record of not possessing. Given some other government in some other country, sure, we can fix it and all will be well.
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Agreed, but the sinking of this ship may well result in the sinking of the entire fleet. Time will tell

 

[falcon786]

"He further confirmed that government was looking at the possibility of a strategic equity partner, and that other state-owned enterprise may also be open for opportunities for strategic partners. "

Cyril is on the right track,take Telkom as an example sure it's making much less than other telecoms companies but it's not making a loss....other state owned enterprises need to be run similar where private equity keeps the checks and balances away from wholesale Zuma style looting.

 

[Frequent visitor]

but isnt keeping SAA going more expensive than shutting it down?

I mean if you shut it down, you don't have to fork out more money, but if you keep it going you have to keep handing over money.

besides bad management, what else is sinking SAA? expensive planes? passenger numbers?
or is there a legitimate reason SAA is in the toilet, besides bad management.

Most of their large aircraft are Airbus A330 and A340, the A340 being predominant. I like both, as a passenger, and they are essentially much the same except that the 340 has 4 engines. Emirates used them for a while, but retired them fairly soon. Apparently the 340 was a bit expensive to run. The 330's are still popular around the world however. So yes, expensive to run aircraft could be part of the problem.
As a frequent flyer, my feeling about SAA is that the cabin crew are not up to scratch, be they black, brown or white. I flew them Business class to Angola in 2008, but I was not paying. I had no problems on that flight at all. But for going to the UK I once used them at my own expense, and they were well below par. I use Emirates as they are better, they are cheaper, and they go to where I want to go - which is not Heathrow. They have 4 or 5 flights a day to Dubai, and 4 a day on to my destination. Their skywards reward scheme was once excellent, but is regressing. SAA's is undistinguished, to put it mildly.
No contest! Their are plenty of other alternatives as well.
SAA can fold for all I care. I like the livery, but that is all.
Sorry SA, you have an overpriced lemon on your hands. Too many snouts in the trough.

 

[Gaz{M}]

Most of their large aircraft are Airbus A330 and A340, the A340 being predominant. I like both, as a passenger, and they are essentially much the same except that the 340 has 4 engines. Emirates used them for a while, but retired them fairly soon. Apparently the 340 was a bit expensive to run. The 330's are still popular around the world however. So yes, expensive to run aircraft could be part of the problem.
As a frequent flyer, my feeling about SAA is that the cabin crew are not up to scratch, be they black, brown or white. I flew them Business class to Angola in 2008, but I was not paying. I had no problems on that flight at all. But for going to the UK I once used them at my own expense, and they were well below par. I use Emirates as they are better, they are cheaper, and they go to where I want to go - which is not Heathrow. They have 4 or 5 flights a day to Dubai, and 4 a day on to my destination. Their skywards reward scheme was once excellent, but is regressing. SAA's is undistinguished, to put it mildly.
No contest! Their are plenty of other alternatives as well.
SAA can fold for all I care. I like the livery, but that is all.
Sorry SA, you have an overpriced lemon on your hands. Too many snouts in the trough.

A number of family members recently flew SAA to different destinations (New York, London etc.)

The all said it was "fine" just unremarkable. That's the problem. It's a mediocre experience when it runs well, and it is an absolute disaster when things go wrong.

I don't see how you make R6 billion more revenue to cover expenses or how you can save R6 Billion just from cleaning up corruption and costs.

Incidentally, SAA was the cheapest direct flights for all these trips. So at least their pricing can be better than other airlines, but not by much.

But why would they not fly more sectors to profitable routes to London and New York? The other airlines are eating their lunch big time.

 

[ArtyLoop]

The consequences would be too dire. Defaulting, getting downgraded by all agencies, losing the last few investors and an outflow of capital may send us the route of Zimbabwe with immediate effect. They will not be able to pay grants and civil war will start. There is no way around this and experts warned about this about 10 years ago when they said the SAA cannot be sold, liquidated or closed down.

The immediate short-medium term (20-100 years) is to force tax payers to keep the airline afloat while clearing the debt. It will be difficult if they do not retrench people, start losing assets and scaling down on operations.

The ANC got themselves into this mess by making use of third-world tactics and now facing first world consequences.

I'd rather we went full Zimbabwe sooner rather than later, tired of the swords and axes hanging over my head.

 

[Visser]

Incidentally, SAA was the cheapest direct flights for all these trips. So at least their pricing can be better than other airlines, but not by much.

Very strange.... the past 2 years we flew to London & New York on a number of occasions and then onwards to Panama, yet, on the 7 times we made bookings, SAA was constantly one of the top 3 most expensive airlines.

 

[Datura]

Why shutting it down is even an option worth explaining for him is a fscking joke. Just manage it. MANAGE. You know, where you take charge and run a company (not into the fscking ground you greedy animals). FFS...

 

[Swa]

Nope, not in this case, and not in the foreseeable future.



Not true, SAA has both the equipment and skills to make a comeback should they be utilised correctly. Sure, the debt burden is a bit much to bear, but mismanagement and corruption is what has brought us here. Fix that, and then we can talk about the future. There is no real (permanent) reason why SAA can't become profitable again.

And there is your problem. Corruption is rife and will stay so while the ANC is in power. Hopefully enough things happen by April for the votas to finally wake up. Just get rid of the thing. Only problem is the debt still remains government guaranteed. Spoiler alert: the Titanic sinks.

 

[Swa]

"He further confirmed that government was looking at the possibility of a strategic equity partner, and that other state-owned enterprise may also be open for opportunities for strategic partners. "

Cyril is on the right track,take Telkom as an example sure it's making much less than other telecoms companies but it's not making a loss....other state owned enterprises need to be run similar where private equity keeps the checks and balances away from wholesale Zuma style looting.

Telkom is not an SOE.

 

[grok]

This is just SAA, apparently Eskom has even bigger problems..

Typically the commies ran things into the ground, had a nice free-for-all with other people's money. With no clue how to fix the mess they've created, like none of this was predicted..

 

[ToxicBunny]

Telkom is not an SOE.

It is an SOC so still to a degree classed as an SOE

 

[access]

build planes make new airlines with the ex-staff. kick gigaba to the curb and undo his visa mess.

 

[Swa]

It is an SOC so still to a degree classed as an SOE

Where do you get that? It's a JSE listed company. I owned some shares.

 

[ToxicBunny]

Where do you get that? It's a JSE listed company. I owned some shares.

Go look at the name.. Telkom SOC

 

[Swa]

Go look at the name.. Telkom SOC

A name held over from when they were an SOE splitting from the Post Office. Means nothing. PIC has a stake in most public companies so why are they not SOE's then?

 

[ToxicBunny]

A name held over from when they were an SOE splitting from the Post Office. Means nothing. PIC has a stake in most public companies so why are they not SOE's then?

Pity the SA Government doesn't agree with you and Telkom is still listed as an SOE
https://www.gov.za/about-government/contact-directory/soe-s

 

[Swa]

Pity the SA Government doesn't agree with you and Telkom is still listed as an SOE
https://www.gov.za/about-government/contact-directory/soe-s

They can claim to rule America. Doesn't change the facts.

 

[KleinBoontjie]

Keeping it running s going to bleed us dry. Please just close it down and let the Sheriff come and possess state property and get it over with.

 

[Visser]

Keeping it running s going to bleed us dry. Please just close it down and let the Sheriff come and possess state property and get it over with.

See the updated article. Ramaphosa admitted that it could not be closed. Debtors will claim all debt back and this will collapse the government and economy. It will keep running on tax payers money indefinitely.