Let’s be clear upfront about one thing: The death of any airline is a huge loss in jobs and air transport connectivity, but there’s a strong case to be made that SA Express should be put out of its misery and allowed to die.
Airlines are among the most difficult businesses to run, particularly as they are highly capital intensive with frighteningly low margins. To top it all, they exist in a stringently demanding legislative environment. Government has shown itself inept at coping with these requirements at SAA and SA Express.
The current noise about combining the three airlines, SAX and Mango with SAA, is just a distraction, akin to rearranging the deckchairs. The costs and difficulties of such an amalgamation would far outweigh any long-term operational cost saving. None of the airlines has the management capacity or the funds to contemplate such a merger.
In a press release in early September, SAX made vague assertions that it is returning to profitability. The route profitability figures show otherwise, and it must be remembered that Mzimela had promised to return the airline to profitability by April this year. The key problem SAX faces is that it lost its market to Airlink, and has also lost the confidence of its passengers.
For passengers, it is difficult to differentiate between Airlink and SAX – or even SAA – as they all use the SAA booking system and even the branding is similar. This makes market differentiation almost impossible. Still, the biggest single reason for the failure of SAX has to be appalling management.
The reality is that SAX has been powerless to compete against Airlink on almost all of its routes, and where it is operating successfully, to international destinations such as Lubumbashi in the Democratic Republic of Congo, it is flying under the protection of SAA.
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