The rot at SAA is probably too deep for business rescue to work
It’s worth reflecting on what brought the battered airline to its knees in the first place
Finance minister Tito Mboweni indicated in his second budget speech last month that SAA would be a radically restructured airline after the business rescue process. But what a radically restructured airline looks like remains a mystery to most of us.
SAA has been in a financially distressed position and unable to pay its debts for some time. Its business model has yielded no positive operating results compared with its industry peers over the years, and the Competition Commission has fined the company at least twice since December 2006 for price-fixing and abusing its dominant position.
Over 10 years from 2008 to 2017, SAA’s revenue has increased on average by a mere 4%, compared with Comair’s 11% average over the same period. SAA underwent a much-publicised structuring process in 2008, which yielded no discernible results...