As the board of SA Express (SAX) was bracing itself ahead of a crisis meeting on Thursday, respected transport economist Joachim Vermooten warned against the apparent foolishness of trying to save the cash-strapped airline.
Having had its wings clipped, literally, for the second time since 2016 after the Civil Aviation Authority had cited safety concerns, it would be extremely difficult for the grounded airline to re-enter the market, Vermooten said.
But Matsietsi Makholo, acting CEO for SAX, begs to differ.
According to reports she maintains that SAX could still be viable, particularly because there’s still space in South Africa’s under-subscribed aviation market.
Be that as it may, Makholo took over at SAX shortly after it was grounded for 36 hours in 2016.
This time, however, safety concerns have kept its planes out of the skies for much longer.
Since SAA is already R21.1bn in the red, it would come at enormous cost to lift SAX out of its dire situation, Vermooten said.
He advised that the embattled airline should rather re-deploy its staff before selling off its assets and whatever else remained.
Should SAX not take to the skies again, it will leave certain air routes open as not all flight paths are necessarily served by the carrier’s state-owned partners which, besides SAA, include Airlink and low-cost flyer, Mango.
Mango’s primary competitor, Kulula, also appears reluctant to step into the void, should one be created by the demise of SAX.
Vermooten indicated that if it was curtains for SAX, it could pave the way for more competitiveness as SA’s airline market was still too monopolistic, despite de-regulation of the aviation industry 28 years ago.
