South African government unaware of R50 million deal between South African Airways and Safair.
Robyn Chalmers reported forBusiness Day on December 29 that a detailed investigation will be launched once an inquiry by Sun Air's liquidators is complete. Sun Air, one of government's first privatization exercises, was sold in 1997 to a consortium of Rethabile, Coordinated Network Investments and Comair. SAA agreed to pay Safair R50m to obtain Safair's co-operation to procure the liquidation of Sun Air and to prevent the disposal or use of the aircraft in southern Africa, or the acquisition of the aircraft by any competitor of SAA. The SAA-Safair deal is understood to be a factor behind Virgin Atlantic's decision to halt its talks with Sun Air employees to buy Sun Air's assets and revive the airline. This deal has allegedly cost South African taxpayers R50 million.
Taryn Lamberti and Robyn Chalmers reported for Business Day on December 28 that SA Airways (SAA) and air services company Safair aimed to deter competition by preventing the sale ofbankrupt Sun Air's four DC-9 aircraft. The deal was condoned by the Competition Board, which indicated that SA could not support four domestic airlines. Government subsequently halted the sale due in part to concern about R20 million still owed to the state on the original privatization.
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South African readers will recall that SAA paid R198m (which was a lot of money in 1994!) to Trek Airways (which traded as Flitestar) shareholders Rentmeester Beleggings (which has been described as the 'Broederbond pension fund'); Safren and private investors. Safren had wanted to buy the Rentmeester stake, but Renmeester asked way too much for it.
Flitestar was hammering SAA on domestic routes - even with incompetent management - and SAA had resorted to the sort of dirty tricks practiced by BA: enticing passengers to fly on them, entering false reservations records to show a flight as full when it was in fact empty; and not providing technical assistance for pushback or maintenance problems as they had been contracted to do.
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South African tax payers should be asking why SAA is using their money to deprive them of a right of choice! In most civilised countries, this would be blatant fraud. Is it any wonder that operations like African Star get licenced - without so much as a raised eyebrow at the antecedents of its CEO?
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And elsewhere in Africa....
Uganda airlines to dismiss more than half its 240 employees.
Michael Wakabi reported for the East African on January 5 that the airline has been operating on trip-leases and code-sharing on routes since December 9, when its lease of a Boeing 737 expired.
South African Airways (SAA) is expected to move in to revamp the airline in March. Severance benefits for the retrenched staff will be met from $1.5 million the airline received recently from the International Society of Travel Agents.
Michael Wakabi reported for Business Day on January 5 that SA Airways will take over the
Ugandan national carrier by March 31. Management sources at Uganda Airlines are working on a redundancy program to terminate at least 59 of the 240-strong workforce. Legislators have approved sale of 49% of the carrier. SAA agreed to let Uganda hold the chair of the privatized carrier for the first year.
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It will be interesting to see if SA actually pay in any cash for QU. Their involvement with SA Alliance Air, for example, had revolved around the very profitable wet-lease of a B747SP that SA was desperate to get rid of; with the result that the airline was effectively bankrupt within a few months of operations commencing.
Alliance Express (formerly Air Rwanda) has also still to see any money from SAA - it is now operating a DHC8-300 leased from an Ethiopian carrier through ... you guessed it, SAA!
BTW, SAA wanted to charge QU US$400,000 per annum for the use of its 'SA' designator. I wonder how much MN is paying BA???
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Happiness is VR at Lagos!