The dead horse that refuses to fly

Andrew Donaldson on Malusi Gigaba's passion for continuously bailing-out our late national airline


EARLIER this week, it was widely reported that 38-year-old Tom Morgan, a reckless sort from the UK, had drifted some 24 kilometres through the skies above Johannesburg in a lawn chair attached to a hundred helium-filled balloons.

It wasn’t long before it was suggested on social media that tourists were taking desperate steps to avoid flying with South African Airways. 

And why not? We need to chat about this particular dead horse.

In his maiden medium term budget policy statement, Finance Minister Malusi Gigaba promised that a “strategic partner” would be found for SAA. At the same time, he banged out some nonsense about why government should keep the airline afloat.

It was admittedly a tough baptism of fire for the preening peacock. Before his speech, Gigaba paraded merrily about the parliamentary precinct. There he was with Accused Number One, Jacob Zuma, and his deputy, Cyril Ramaphosa, all thumbs up and beaming broadly for the camera.

He had a fair stab at telling us we are alarmingly deep in the brown stuff. Growth forecast was revised from 1.3% to 0.7%. Debt would escalate to reach 61% of GDP by 2022. Tax collections were R50.8 billion less than projected in February. 

Gigaba did happen to mention that, although not off the agenda, the country couldn’t afford the nuclear deal at present. This, mind you, in the presence of the new energy minister, David Mahlobo, lurking like a brute sea lion a short distance from the podium. It takes a brave man to do that. 

Sadly, the markets didn’t think much. The rand tanked, and further downgrades by the ratings agencies loom in the offing. This, in turn, will result in an even weaker rand and higher borrowing costs, a situation that Gigaba, his trademark grin now more a death’s head rictus, had failed to mention on Wednesday.

Meanwhile, he has insisted, money will continue to be squandered on illogical SAA bailouts. It was in the “national interest”, he told the National Assembly, not to cede “connectivity to all parts of the world” to other airlines. 

“SAA sells South Africa’s economy, tourism and culture to every one of its passengers. Global airlines do not, and will not, perform this priceless marketing and branding role.”

This is frankly rubbish, patriotism being the refuge of a scoundrel, and what-what. But it got worse. Gigaba later told businessmen that the airline employed 10 500 people and it would be a huge blow if government lost SAA and jobs were lost.

“Selling it would have a trigger effect on other lenders and people who borrow money from South Africa. Selling SAA would create a very bad impression for our economy.”

A bit late for such considerations, you’d think. 

Here at the Mahogany Ridge, we remember that it was on Gigaba’s watch, as minister of public enterprises, that the rot of mismanagement, corruption and looting began at state-owned entities like SAA and Eskom.

We also recall a 2012 fin24.com report which highlighted the airline’s inefficiency by comparing staff numbers to the size of its fleet.

SAA had almost 165 workers per aircraft, way more than other airlines. Kenya Airlines, for example, had about 105 employees per aircraft, Qantas had 109, American Airlines almost 87 and United Airlines 71. 

Five years later, SAA has reduced its fleet from 61 aircraft to 55, about 191 employees per airliner, and has scaled back operations considerably. 

Now consider Ryanair. Its employee to aircraft ratio is about 30 to one. True, it’s perhaps unfair to compare this low-budget Irish airline with SAA. The routes are different, invariably far shorter, and what have you.

But Ryanair is a successful operation. According to its website, it employs about 11 700 people, operates more than 1 800 routes and will carry some 131-million customers this year. It has a fleet of 400 aircraft, operates in 33 countries from some 200 airports, has 86 bases in Europe and North Africa, has an 88% punctuality rate, and an unblemished 32-year safety record.

SAA, on the other hand, has been saddled with Dudu “The Dodo” Myeni, the President’s special lady friend. She was fired earlier this month, but during her time there — she was first made a director in 2009, then chairman of the board in January 2015 — the airline’s bailouts escalated dramatically.

According to Business Leadership SA chief executive Bonang Mohale, government has spent some R50-billion on SAA since 1999. For that amount of money, Mohale told a recent panel discussion, “we could have bought Emirates Airlines”.

Good job we didn’t. We’d have screwed that one up, too.

This article first appeared in the Weekend Argus.