An economist seems to think so.
CAPE TOWN – The abrupt cancellation of flights by SA Express on Wednesday could be a sign that it is now time for the state-owned airline and its parent company South African Airways to fold.
This was according to Mike Schüssler, owner of Economists dotcoza, who said the airline, along with its parent company SAA, was not immune to failure.
SA Express’s divisional manager of marketing, brand and product, Mpho Majatladi, said on Wednesday that operations resumed after 4pm and that it regrets the inconvenience that this had caused to its passengers and other customers.
“The airline’s flights were cancelled for operational reasons. Alternative travel arrangements were provided for all passengers to get to and from their destinations,” said Majatladi.
Reports claimed that the airline’s management was locked in meetings for the better part of the day, trying to find a solution. Majatladi could not be drawn to comment further on the cancellation.
Schüssler said the impact on domestic tourism would be huge, especially to the smaller towns that the airline services. “High-end tourism will not be spared either. It’s sad that this is happening again.
“SAA is not making any money and such an event is more than likely to cause travel agents to avoid making bookings with the airline,” he said.
The South African Civil Aviation Authority suspended the airline’s operating permits in May last year around the same time Public Enterprises Minister Pravin Gordhan announced the appointment of a new SA Express board.
SA Express was again in the news earlier this year when its chairperson, Tryphosa Ramano, took a hard stance against allegations of corruption at the company, and said the group would open fraud and corruption charges against its erstwhile executive over “multimillion-rand” theft.
Ramano said the decision to charge the former executives came after a thorough forensic investigation flagged a number of transactions, which might have prejudiced the airline by millions of rand prior to its temporary grounding last year.
Finance Minister Tito Mboweni has earlier made a case for selling the national carrier, saying it would be hard to find a private equity partner for SAA.
However, President Cyril Ramaphosa poured cold water on any future sale of SAA, saying the state-owned airline held too much debt.
Ramaphosa said there would be no value gain from such a sale, suggesting that one would have to possibly pay somebody to take SAA off their hands.
He said the government was actively pursuing a private equity partner for SAA and possibly other state-owned enterprises.