SAA bail-out makes no sense

Janine Myburgh, president of the Cape Chamber of Commerce and Industry

The government is considering selling its shares in Telkom to finance yet another bail-out for the airline.

SAA has had more than enough time to turn its fortunes around, and the chances of doing so now must be close to zero. We must remember that SAA’s main competitor, Comair, is doing well and making a profit in the same market. This tells us that SAA is badly managed and unable to compete, despite the resources that have been poured into it. SAA needs drastic surgery not bail-outs.

The new danger is that SAA will start losing customers because people do not like losers, and that will further reduce its chances of any kind of recovery.

To sell a good asset like Telkom shares and use the money to prop up a bankrupt airline with a bleak future does not make any sense.

The only thing that we can learn from this sorry story is that the government does not understand business and, for the sake of the country, it should get out of the commercial space. It simply does not have the management skill to compete in the market place.