SAA is without a doubt the hot topic of the day. I get the impression that the majority of South Africans' gut instinct is WHY ARE WE GIVING THEM MORE MONEY? I would, however, like to give a bit of background to the whole SAA story as far as I understand it. Please note that I do not profess to be an aviation expert, but have been around the periphery for many years and heard many stories and opinions. So let's take a trip back in time…

SAA was a strategic asset during the apartheid era. It was not a question of whether it was profitable or not – the country was under sanctions and it was essential for the Government to have an international carrier. The stories from this time are legendary. SAA did not have overflight clearance over Africa and had to fly ‘around the bulge’, that is to fly around the west coast of Africa. Many an SAA jumbo jet captain has told of landing at London Heathrow with virtually no fuel left on board. Being able to get around the world was so important that the South African government even paid for a runway to be built on Sal in the Cape Verde Islands. No expense was spared. It was a magnificent airline and was amongst the best in the world.

But things change. And for South African Airways, there were two major changes on the horizon. Firstly, as South Africa headed towards a democratic republic, sanctions ended. This coincided with aviation becoming cheaper and more accessible globally, and a large number of new carriers entering the market, and existing carriers expanding dramatically. As this happened, the new Government started opening up markets but, by doing that, for the first time, SAA started to encounter competition. The monopoly that the airline had held since 1929 was slowly eroding.

The second change was that there was suddenly a massive demand for pilots globally. SAA has always had a powerful pilots’ union and it had now reached the stage where pilots were leaving in droves for attractive packages in places like Dubai, Hong Kong and Singapore. In order to keep them, SAA entered an agreement where the pilots' salaries would be pegged in dollars. This didn't sound too bad – the rand was trading at about R6/US$1 at the time. SAA was never able to renegotiate that agreement, with the result that the pilots have been earning more than double that of any other pilot employed in a South African airline.

SAA in trouble in the 1990s

The Government already realised in the late 1990s that SAA was in trouble and brought in an American aviation expert by the name of Coleman Andrews. I have heard that his nickname in the industry was Skippy, because he used to sell anything that wasn't bolted down, made the financials look good and then leave with a healthy bonus. Whether true or not, I can't say. Either way, he persuaded the board of SAA to sell the aircraft they already owned and lease a new fleet of Airbus aircraft. All these leases, of course, were dollar-based, but this was also around the time that the rand was trading at about R6/US$1. Pity it didn't stay that way.

So those were already two massive costs. Another huge cost was the wage bill. Again I cannot say whether this was deliberate job creation or just lack of productivity, but when benchmarked against similar-sized airlines, the number of staff per airline seat was three times higher than similar carriers such as Qantas. Certainly, there was a lack of discipline amongst cabin crew. It was so bad that management couldn't rely on the standby system any more (in case someone rostered didn't arrive for work). Instead, they had to get crew members to sit at Airways Park in full uniform, fully packed until the flight had left because they just wouldn't answer their phones if they were on standby.

At the same time, SAA Technical, which was rated as one of the best in the world (and if I recall correctly, the best in the world several times) started slipping in standards. Where the rigorous checks previously far surpassed any FAA or other requirements, mistakes were staring to happen. Airlines, which used to come to South Africa to have their aircraft serviced, started taking their business elsewhere. I doubt that prior to this current débâcle, there were more than a handful of servicing contracts left.

First class dropped

In an attempt to provide the right product (I can't say whether it was right or wrong), SAA dropped its first-class cabin. One thing I do know, however, is that many Ministers stopped flying SAA internationally as they could fly first class on other carriers.

There are a number of other strategic issues. Geographically, SAA would have been better suited as a strong regional carrier post-1994 whilst retaining just a few key international routes. I think this is the proposal of the BRP now. Unfortunately, 20 years down the line, it will have to compete with Ethiopian Airlines, RwandAir and now even, Airlink. Being positioned at the bottom end of Africa is a massive geographic disadvantage.

So as much as many of us would like to blame SAA's woes solely on corruption and total incompetence over the last decade or so, personally I don't think that's the case. Had things been different in South Africa, SAA would have been a completely different bird.

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