Suggestions last week that government is privatising SA Airways (SAA) "on the sly" are probably optimistic - though it would be nice if they weren't.
The Democratic Alliance bases its inference on the national airline's desire to sell off support activities and concentrate on carrying passengers. SAA recently invited bids for the airline's technical division and Voyager frequent-flyer programme, and has hinted that the Air Chefs catering division and even the SAA Cargo freight operation could follow.
The national carrier has been cutting what it considers non core activities since the 2007 launch of a turnaround plan that also involved salary freezes, job cuts, route reappraisals and fleet reduction. However, the airline wants to retain a majority interest in its subsidiaries. It can't quite summon up the nerve to cut them loose.
Government has poured billions of taxpayer rands into SAA in recent years to plug revenue gaps and keep the airline aloft. A succession of CEO s have stated that each bailout would be the last. Even Trevor Manuel, as finance minister, said the hand outs had to stop. As long as cash parachutes are available, the incentive to take harsh business decisions is missing.
The modern history of aviation is littered with failed national airlines that governments could no longer afford to subsidise. The sooner government accepts the need to fully privatise SAA and relinquish control, the better. This doesn't mean the airline will be sold tomorrow. It took eight years to privatise British Airways, and turn it from a cash drain into a national figurehead. The business had to be stabilised, offer a credible long-term business plan, then show it worked - before BA could be floated to investors.
There is a model there for SAA to follow. For years it has lived hand-to-mouth, rarely looking more than a couple of years ahead. This is as good a time as any to break out of permanent survival mode and take a forward view. It may not have achieved everything it set out to do, but the 2007 survival plan has brought some coherence to the business. Passenger and freight levels are beginning to improve as the global aviation market emerges from horrific recession. There is a base on which to build. What is now required is political conviction.
The same could be said for Airports Company SA (Acsa) - though, ironically, the privatisation of its UK counterpart is an example of how not to manage the process. The British Airports Authority (BAA), which owns five of Britain's 10 busiest airports, is a division of Spanish company Grupo Ferrovial. It has been accused of abusing its virtual monopoly in London and Scotland and ordered to dispose of some airports.
Acsa, which is 75%-owned by government and controls all SA airports, has been accused of similar abuse. Its request late last year for a 133% tariff increase to fund its infrastructure programme and "reward investors adequately" caused fury among airlines already struggling to survive the worst loss-making period in their industry's history. The fact that some projects, such as the new King Shaka International airport at La Mercy in KwaZulu Natal, are considered unnecessary, didn't help. Outrage was barely mollified when the industry regulator reduced the rise to 60%.
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