[OPINION] Hang in there SAA
There’s a message for flat-broke South African Airways: hang in there!
It runs in parallel with Public Enterprises Pravin Gordhan’s warning that the airline must clean out corruption if it hopes to survive.
And it supersedes the call by Finance Minister Tito Mboweni that the company, which has not made a profit since 2011, must go to the wall.
The latter is perfectly right in saying no bank or enterprise would get involved with SAA in its current financial state.
But Mboweni’s been repudiated by President Cyril Ramaphosa because, he says, closing the airline would necessitate immediate repayment of its R22 billion debt. This would enormously damage the fiscus.
There’s speculation that Ramaphosa’s remarks have turned his new Finance Minister into a lame duck: a political has-been who is allowed to say what he wants because he is only serving his time until after next year’s election.
In fact, Mboweni might have been directed to throw a stone into the bush to see what reaction he could provoke from SAA staff and trade unions who have a veritable bottle of bitter pills to swallow if survival is the option. These range from exposing the corruption within their ranks to accepting marginal salary increases at best.
My introductory message is based on African aviation predictions.
If SAA can survive, it can pick itself up on the approaching boom in African air travel.
International Air Transport Association (IATA) figures show the increase in air traffic between sub-Saharan Africa and China will run at 11% over the next decade, which will place it among the fastest growing routes on the planet.
Projected traffic between South Africa and China is pretty much in line with this.
China is projected to buy 7,690 new aircraft by 2037 with a staggering price tag of $1.2 trillion.
This makes the contest between Airbus and Boeing for sales to China the most interesting aviation battleground.
US President Donald Trump’s trade war with China is doing Boeing no favours in this dogfight.
Just this week, Airbus executives are in Beijing talking about the sale of 180 Airbus A320s at price of $18 billion.
If it does get to contest the skies tomorrow, SAA will face new competition.
As US voters cast their ballots in the midterm elections, the Airbus 330-800, which will be the warhorse in that battle, made its maiden flight in Toulouse.
The wide-bodied liner with a capacity of 257 passengers is powered by Rolls-Royce Trent 7000 engines that are quieter than their predecessors and 14% more fuel efficient.
Air Mauritius, Air Senegal and RwandAir have firmed up their orders for the new aircraft.
The nascent Uganda Air has signed a memorandum of understanding for two A330-800s.
Nigeria - which has taken an on-off approach to reinstating a national carrier - could add to the competition.
However, there is plenty for everyone.
The dearth of road and rail infrastructure makes air travel between African countries - and particularly the movement of perishable goods - indispensable as their population grows to 1.4 billion.
Ethiopian Airlines, which has a fleet more than twice the size of SAA’s, will indubitably remain the continental giant and an example the South African carrier should emulate wherever possible.
Its major competitors are not SAA, Kenya Airways and Egyptair but Qatar, Emirates and Turkish Airlines.
Its growth has come from a protected regulatory framework, the cross-subsidisation of airport revenue and concessionary fees at Ethiopian airports.
Competitive pricing has enabled it to make the frankly substandard Bole International Airport in Addis Ababa a hub competing with Singapore, Istanbul and Dubai.
The bulk of Ethiopia Airlines’s planes are wide-bodied liners from the Boeing and Airbus range.
The fleet is constantly updated with planes being exchanged every six-and-a-half years.
Somehow SAA has to change its message from “Ah, if only” to becoming the Little Red Engine saying: “I think I can”.
Jean-Jacques Cornish is an Africa correspondent at Eyewitness News. Follow him on Twitter: @jjcornish
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