Where It All Began

What’s the deal with SAA?

 

So what’s the story with SAA? In case you don’t know, SAA is South African Airways, an example of the endangered species ‘national carrier’ and the largest airline in the region.

Simply put SAA is what is known locally as an SOE – state owned enterprise. So it’s not a national company, it’s a private company in which the state is the majority shareholder.

Most of South Africa’s SOEs are pretty much permanently in trouble. The only one that is making money is Telkom but all the rest are making a whopping loss.

In the case of SAA, it’s a huge R5b loss per year. To put that into context, that effectively means that every seat on every SAA plane is subsidised by the South African taxpayer by at least R770 (US$50).

Pity our State Owned Enterprises minister, Pravin Gordhan, who has to make the choice between collapsing the entire company or going again to the state to borrow to keep a lame duck going.

Meanwhile the airline continues to offer great service and reasonable prices but for how long is anybody’s guess.

https://www.dailymaverick.co.za/article/2018-05-14-pravin-gordhans-hobsons-choice-at-saa/