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Political agendas 'have no place in SAA ... Fat-cat bosses lick up all the crea... Money supply data not a pretty picture... Gloomy prospects drive car ... |
Political agendas 'have no place in SAA sale'
British Airways and Malaysia Airlines are vying for a stake in SAA, writes ROGER MAKINGS
However, foreign sources are adamant that top management in the airline will have to be depoliticised - a reference to the political appointments that have been made at parent company Transnet in recent years. Said one source: "If the government is to retain control, as has been stated, foreign bidders will have to be reassured that management would run the airline on solid commercial principles without thought to political agendas." To this end public enterprises minister Stella Sigcau has already proposed a master plan which she hopes will see each division of Transnet with its own board chaired by an executive from the private sector, as a forerunner to seeking full corporatisation and possible privatisation. A cabinet committee is reviewing her plan and a decision can be expected later this month. Public enterprises spokesman Wandile Zote said on Friday no thought had yet been given to the appointments of private sector businessmen to head up Transnet boards. Although no decision has been made on the percentage stake for sale, informed SAA sources believe this will be between 30% and 35%. Employees will get from 5% to 10%, with the balance going to the National Empowerment Fund to make up 49%. The state is expected to retain its controlling interest for up to five years before selling off its remaining shareholding. SAA's partial privatisation is likely to loosely follow the Sun Air model which, hiccups aside, eventually saw its successful privatisation. Says Virgin's southern African general manager David James: "We are still interested in SAA. The proposed stake for foreigners is not huge, but also not insignificant. It gives the foreign partner a foot in the door in Africa." However, foreign observers are adamant that if the government is to retain control of SAA in the short term, controlling management must be competent. British Airways said some months ago, when disclosing its interest in SAA, that one of the SA carrier's greatest limitations was its lack of new aircraft to increase revenueearning opportunities. In 1995 SAA announced it had selected two Boeing 747-400s and four B777s, with an option on another three, to upgrade its fleet in the face of growing international competition. The B777 part of the decision was put on hold by Transnet executives and a government department which led to SAA's losing its production slots for the badly needed aircraft as well as having pay up for contractual obligations. This week a British aviation weekly claimed the decision was costing the airline about R200million a year and that even if it was reversed, the B777s may not be available before the turn of the century - seriously affecting chief executive Mike Myburgh's Operation Clean-Up - which, since its implementation in June, has already saved the carrier R85-million. It is expected that by end-March next year, Operation Clean-Up will have saved R170-million, going some way in eradicating the R323-million loss reported by SAA in the year to end-March this year. Some of the problems SAA will have to address before it finds a foreign equity partner, will be its lack of profitability, high operating costs, falling service standards, low productivity, greater route optimisation and crime prevention.
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