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SA should act to preserve SAA and seek to associate the airline with Ethiopian Airlines Group, according to a study commissioned from ANC MPs.
The assessment, seen by Bloomberg, was prepared by African Aviation Services and dated October 4. It was presented to a group of ANC parliamentarians on Monday, according to an ANC official who asked not to be named because the information was not public.
The insolvent national carrier went into administration in December and now needs more than R10 billion to restart, according to a plan drawn up by SAA commercial rescuers. The airline has not made a profit since 2011 and has survived thanks to government bailouts.
“There is inherent value in an existing airline that cannot be easily replicated in a new replacement airline,” Nick Fadugba, African Aviation CEO and author of the study, wrote in the paper. “After a thorough analysis, our preferred strategic capital partner for SAA is Ethiopian Airlines.”
Ethiopian Airlines shares a “pan-African vision” similar to SAA’s and is the strongest airline in Africa, Fadugba wrote.
Strong market
Fadugba declined to comment when called by Bloomberg. Public Enterprises Department spokesman Sam Mkokeli was unable to immediately comment and ANC spokesman Pule Mabe did not answer his phone or respond to a text message seeking comment.
“SA has the strongest aviation market on the African continent,” wrote Fadugba, citing research showing that five of the 10 most lucrative routes in Africa are in, or from, SA, three of the 10 busiest airports on the continent are in SA and six of the 10 busiest routes are within or from the country.
An Ethiopian Airlines spokesman said Tuesday that the airline “did not have an official report” on the study.
Ethiopian Airlines is willing to provide aircraft, pilots and maintenance services to SAA, but does not want to help pay off its debts and cover the costs of reducing its workforce, Tewolde GebreMariam, the airline’s chief executive, said in an interview last week. .
Echoing GebreMariam’s comments, Fadugba wrote that the SA government should take over SAA’s debt and not tax a new partner with it.
The airline is unlikely to be successful unless an investor is found, he said.
“Without a strategic partner, all the ongoing restructuring efforts being made are similar to reorganizing the deck chairs on the Titanic once again,” he said.
Bloomberg
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