In November 1986, at the height of the sanctions movement against the apartheid regime, the United States Congress passed a motion to ban air traffic between the US and South Africa. Desperate to maintain its presence on the lucrative route, SAA approached no lesser an authority than the chief justice of the US Supreme Court — William Rehnquist — to seek a veto on the US Congress decision. It was soundly rejected.
The end of the apartheid regime and the opening of the skies had profound implications for SAA. As sanctions were lifted, SAA could once again fly the national flag across the world. At the same time, however, all other airlines could then get access to the South African market unburdened by the moral dilemmas of the past.
In December, SAA was placed in business rescue. This was in response to the resolution by Solidarity trade union to approach the courts to impose a business rescue process. Since then, the airline has drafted an initial version of the business rescue plan — Project Iconic. Its main objective is to determine whether SAA can be saved in any form. Almost 10000 direct jobs are on the line in the case of the one option — an outright liquidation.
This has been compounded by the fact that, since February, SAA has announced blanket cancellations of all domestic lines except one. The problem is that even if the final rescue plan changes that decision, the prospects of passenger uptake on the restored routes will be low for a while until a track record of reliability is re-established.
Political noise around the process has done little to address the main problems. Adherents of the survival at all costs option — who admittedly haven’t seen the financial statements — refer to the prevalence of evergreen contracts with predominantly white businesses as the key issue. Missing from that narrative is the fact that the business rescuers are within their rights to interrogate and restructure such contracts if need be.
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