PPRuNe Forums - View Single Post - Mango - all you need to know about it (threads merged)
Old 14th Apr 2006, 12:15
  #99 (permalink)  
PAXboy
Paxing All Over The World
 
Join Date: May 2001
Location: Hertfordshire, UK.
Age: 67
Posts: 10,170
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In my opinion, SAA starting a LCC is yet another step for them to try and return to profitability, not to waste money, yet. If this works, would all not support it, rather than keep on slagging them down..?

The same sentiments were shared when 1Time started, its all about trying to protect your turf.
The point being made is that 1Time was a new start up (as I understand it) and SAA is a legacy carrier. Around the world, legacy carriers that have started LCCs have struggled and, often, decided to sell it off (for better or for worse).

A simple example from an unrelated area: In the UK in 1985, two companies started up cellular radio telephone service. A company called 'Cellnet' was 50% owned by British Telecom who were only just emerging as a stand alone company and were not yet listed on the stock market. They had run mobile radiophone service (VHF) for many years and already had customers and knew about running mobiles (they thought) and they were highly confident that they could run this new technology.

The other company was a start up called Vodafone.

The licenses became active at 00:01 on 1st January and Vodafone connected their first call at that time, Cellnet followed 17 days later and have (in my opinion) never caught up. Certainly, Vodafone is now a global company of massive influence and clout. The Cellnet brand? Eventually it was sold off to other parties and rebranded as 'O2' and still runs many millions of customers but has always been the Number Two in this country and, by some measures, is the Number Three.

Moral of the story: Legacy companies think that they know how to be agile and new. Mostly, they cannot. This is NOT about slagging SAA operational staff, whom I respect and would pax with any day of the year. Also, it makes no never mind if SAA is run politically or commercially - they still would not know how to be a new and nimble company. The rest of the world has already tried this in many areas and the results can be read in the stockmarket and financial papers.
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