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How Far The Mighty Have Fallen

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@cryptoandcoffee
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The Airline has become somewhat of a joke these days and is not taken seriously by anyone.

South African Airways announced this week that they will relaunch the new airline in August. The airline went into business rescue as lockdowns hit and have not been operating since. This is actually a relief for all the tax payers in the country as this was one company that was not run very well and was used to getting bailouts each year in order to operate.

source This chart tells a story as back in 2006 the airline was profitable and then the bailouts started. Surely someone should have suspected somehting was seriously wrong. This is a good business and should never require a bail out of any kind.

The new deal is that the airline does not receive anymore government bailouts and it needs to stand on it's own two feet. Last year it received almost $1 billion and over the last few years has received more than $5 billion in extra funding to stay afloat. Government puppets were put in place to run the airline and had no clue as to what they were doing and had no right to even be working in an airport let alone running it.

I kind of chuckled listening to an interview with the new CEO as he was asked how many planes they had in their fleet. His answer was 8 planes and thought as a National carrier that is rather Mickey Mouse and a waste of time really when you start to think about it.

Most routes require two planes as they cross over mid way when servicing those routes to keep a constant flow happening. Throw in cargo planes which are more lucrative than passengers at the moment and how many planes do they really have to service the public?

It is rather sad to see a demise of an airline that was known to be one of the best around. How can anyone screw up a business that should be printing money is beyond me. Yes there have been testing times with lock downs but they weren't operating then as they were already bankrupt.

When Jacob Zuma was in power his friends the Guptas managed to influence the airline into selling off some lucrative routes to an airline they had shares in. Surely this should have raised questions immediately as to why the money suddenly stopped pouring in.

One thing I have known for years which is finally being addressed by the new malmanagement group taking over is the amount of staff they had on their books. I know from a friend who worked closely with the previous airline that they had the most number of employees compared to passengers compared to any other airline in the world. The gold standard for airlines is 1 employee for every 100 passengers in the air and they had 1 employee for every 20 passengers which tells you they had 5 x the number of staff and could never make a profit no matter what they did.

Reading from the latest reports they are keeping 1000 staff and retrenching just under 5000 which brings the business more into line of where they should have been from the beginning. They have fired all their pilots or retrenched them due to strike action for non payment. The airline has now been training up new ones which is a red flag to me and will not be using this airline again even if I was offered a free flight. Thankfully we have other options and aren't reliant on the national fleet of 8 planes.

As a business this is prime as not only is their a captive audience for internal flights but they can control many outward and inward bound routes within the region. It wasn't surprising when Richard Branson offered to buy them out as this as a business deal is a no brainer and would give my eye teeth for this. I do believe that this needs to be privatized and have no influence form government to succeed and don't believe this attempt will make it.

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