THE EDITOR:
October 2022 – SAA is at a cross roads – and all its options are dead ends.
SAA FACES TWO DEADLINES: First, and most immediate, the 90-day deadline (to 3 November) to provide proof of its viability to the air services licencing council (ASLC). Second; its promise to finalise the Takatso deal by March 2023. Both of these deadlines are looking impossible.
The most implausible deadline is end March next year when all regulatory hurdles must be cleared for the Takatso consortium to pay its R3bn contribution. This includes the need to amend the South African Airways Act 5 of 2007 – which would normally require up to two years – and the need to amend the airline’s Air Operators Certificate – which normally requires 18 months.
The recently appointed ASLC is vigorously implementing a ‘use it or lose it’ policy. Earlier this year this effectively wiped out the last vestiges of value in the moribund SA Express. The ASLC has now revoked 20 out of SAA’s 52 routes, as the airline had not serviced them within the three-month limit. Given the value of SAA’s routes, particularly its regional and long-haul routes, there is speculation as to what impact the removal of almost half of the airline’s permissions will have on its value to the Takatso consortium.
‘a mockery of SAA’s advertising claim’
Due to the regulatory requirements the Takatso deal remains as out of reach as a carrot before a donkey. Meanwhile, the pressure mounts as the airline has the overhead structure of a much larger carrier and it must be fast burning through the R2.6 billion that was set aside for working capital.
The more time passes, the faster the airline deteriorates. It has fallen a long way from its glory days before Dudu Myeni – when it only lost R1 billion a year. Five years ago it had 42 aircraft, now it has just nine, which makes it unable to service the route rights it still has. Fleet renewal is critical, yet discussion with the major airline manufacturers indicates that SAA is so unsure of its future that it has not been able to issue a Request for Information (RFI) for fleet renewal as it has no idea what routes it will be able to fly. An RFI is but one of the many early steps required before an airline can issue a Request for Proposals (RFP) that specify the actual aircraft type and number requirement.
The general decay continues; in the latest Skytrax award SAA has gone from being the best airline in Africa to the third best. This makes a mockery of SAA’s advertising claim that; ‘Those who know fly SAA’ – it appears the opposite is true. In 2013 SAA was rated 21 amongst the world’s airlines. It has dropped to 79.
The demise of this once proud airline continues to gather speed. The chances of it pulling out of this flat spin are remote.
