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We can't let SAA crash and burn

It is in our national interest that SAA survives and that it largely remains in public hands, the writer says.
It is in our national interest that SAA survives and that it largely remains in public hands, the writer says.

The writing has been on the board for a while, it was just a question of when. But the news that almost a thousand jobs are set to be lost in retrenchments at SAA, is still a bitter pill to swallow.

It is all part of a painful restructuring process that officials say would result in the national carrier staying afloat in the long run, without depending on government bailouts.

If it does not embark on this process, the airline's leadership says, SAA would be forced to shut down in the future.

Its demise would be even more devastating, not only for the 4,000 employees who will be remaining after the retrenchment process, but for the country as a whole.

As a national carrier, SAA carries some national responsibilities that privately owned airlines are not obliged to. These include operating on international and local routes that may not be profitable, but are critical to the country's economic activities.

Hence it is in our national interest that the airline survives and that it largely remains in public hands.

But clearly the current model is not working. Yes, years of mismanagement under a previous board forced SAA into the sorry state of finances it finds itself in today. But we cannot act as if, before state capture and corruption crippled the airline, there were not already structural problems that were making SAA dysfunctional.

SAA has been in crisis mode since the late 1990s and any lasting solution to its problems should be cognisant of that.

Doing so would help us review the entire ownership structure as well as the manner in which the airline is managed.

Outright privatisation is not a solution given that private owners, driven by the profit motive, would pull the airline out of some strategic, but not highly lucrative, routes.

But the country can consider selling a stake in the airline to other operators who can then help it with a turnaround strategy.

Alternatively, the state can continue to own SAA but put its management in the hands of a private company whose reward would be based on its ability to make the business self-sustainable while remaining faithful to its public mandate.

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