More dodgy dealings by SAA?
Guest
Posts: n/a
More dodgy dealings by SAA?
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.
======
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.
=====
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?
+++++++
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.
======
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???
------------------
Happiness is VR at Lagos!
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.
======
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.
=====
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?
+++++++
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.
======
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???
------------------
Happiness is VR at Lagos!
Guest
Posts: n/a
Excellent "Gen" Guvnor!!!
Keep it coming...I'm writing it all down....
Whooaahh!!!
PS. I'll get back to you shortly on the other matter in hand. I'm having to ask for soem assistance from the various "experts" behind the scenes. Bear with me..
Keep it coming...I'm writing it all down....
Whooaahh!!!
PS. I'll get back to you shortly on the other matter in hand. I'm having to ask for soem assistance from the various "experts" behind the scenes. Bear with me..
Guest
Posts: n/a
South Africa's Sun Air is reported to have been improving
financially when it was shut down by SA Airways. Business Day
reported on January 20 that a liquidation inquiry into the airline's
demise found that the company was in the black with R28m cash
on hand when it was shut down in mid-1999. Comair executives
have testified that underlying Sun Air's demise were attempts to
remove managing director Mr. Johan Borstlap and tensions
between Comair and Rethabile Group (which held 25% and
35.75% stakes in Sun Air, respectively). Comair chairman Mr.
David Novick has testified that a number of elements contributed
to Sun Air's problems, including high overhead costs and
unrealistic pricing structures. Sun Air, he noted, could not afford
to sell its tickets at such low prices. SAA's aggressive marketing
in 1998/1999, Novick said, contributed to overcapacity in the
market, but he also reported that Sun Air's management was
weak. Comair and Sun Air were reported to have discussed a
possible merger and a code-share arrangement. According to
Novick, such an agreement could have saved R100m annually
and saved Sun Air if Rethabile Group had not rejected the idea.
Another witness to the inquiry, Comair deputy chairman Martin
Moritz, also stated that poor relations existed between directors
from Comair and Rethabile Group. After November 1999,
SAA's marketing placed further capacity on the market, at the
same time that Sun Air started to lose money. Afterwards,
Novick said, Sun Air's situation worsened rapidly.
I have been reliably informed that Rethabile directors were asked "where's the money?" (for their shares) and they told Comair "We do not have to pay ... you must pay for us, because of all the suffering we had under Apartheid, when you flourished!"
I see that South Africa's new Equal Opportunities Bill outlaws just about every form of discrimination ... except affirmative action, which is now institutionalised.
To me, this looks suspiciously like apartheid is well and truly back again ... except now you have to be black to benefit!
Welcome to Africa, guys!!
------------------
Happiness is VR at Lagos!
financially when it was shut down by SA Airways. Business Day
reported on January 20 that a liquidation inquiry into the airline's
demise found that the company was in the black with R28m cash
on hand when it was shut down in mid-1999. Comair executives
have testified that underlying Sun Air's demise were attempts to
remove managing director Mr. Johan Borstlap and tensions
between Comair and Rethabile Group (which held 25% and
35.75% stakes in Sun Air, respectively). Comair chairman Mr.
David Novick has testified that a number of elements contributed
to Sun Air's problems, including high overhead costs and
unrealistic pricing structures. Sun Air, he noted, could not afford
to sell its tickets at such low prices. SAA's aggressive marketing
in 1998/1999, Novick said, contributed to overcapacity in the
market, but he also reported that Sun Air's management was
weak. Comair and Sun Air were reported to have discussed a
possible merger and a code-share arrangement. According to
Novick, such an agreement could have saved R100m annually
and saved Sun Air if Rethabile Group had not rejected the idea.
Another witness to the inquiry, Comair deputy chairman Martin
Moritz, also stated that poor relations existed between directors
from Comair and Rethabile Group. After November 1999,
SAA's marketing placed further capacity on the market, at the
same time that Sun Air started to lose money. Afterwards,
Novick said, Sun Air's situation worsened rapidly.
I have been reliably informed that Rethabile directors were asked "where's the money?" (for their shares) and they told Comair "We do not have to pay ... you must pay for us, because of all the suffering we had under Apartheid, when you flourished!"
I see that South Africa's new Equal Opportunities Bill outlaws just about every form of discrimination ... except affirmative action, which is now institutionalised.
To me, this looks suspiciously like apartheid is well and truly back again ... except now you have to be black to benefit!
Welcome to Africa, guys!!
------------------
Happiness is VR at Lagos!
Guest
Posts: n/a
Look at this, Guvnor. This was published in today's (1 Feb) Business Report. The Journo is Stewart Baily.
Pretoria - The inquiry into last year's failure of Sun Air heard yesterday that Johan Borslap, the airline's chief executive, had been ordered by Coleman Andrews, the chief executive of South African Airways (SAA), to proceed with the winding up of Sun Air.
SAA was neither a creditor nor a shareholder in Sun Air.
Andrews said the decision to close the airline had been taken because of safety concerns over the airline's fleet.
"Borslap told me he wanted to close Sun Air over safety concerns," Andrews told the inquiry 'there appeared to be a substantial risk that Sun Air aircraft would fall from the sky".
Senior counsel for the liquidators contended that Borslap was under the impression SAA had acquired control of Sun Air after meeting with Andrews on August10 last year, three days before Sun Air folded.
Andrews told Borslap that the deal in which SAA would acquire 75 percent of Sun Air would be discussed later that day with the department of public enterprises, which had to approve it.
But the meeting, where the deal was to be ratified, was postponed to August 13. On August12, however, Borslap returned to SAA's offices and was instructed by Andrews to close Sun Air down. Andrews had allegedly not informed Borslap whether the meeting with the government had taken place. Andrews admitted that SAA was at no point in control of Sun Air.
It also emerged yesterday that SAA had summonsed Safair, the aircraft leasing company to return R50 million that SAA had paid to the company in August last year. SAA contends that the money was paid in error. The R50 million had been paid to Safair to ensure that the aircraft it leased to Sun Air would not be released to a competitor within the Southern African Development Community. Andrews said the "broader transaction" had the approval of the SAA board.
The money however was only to have been paid if SAA's purchase of the stake in Sun Air was approved by the government.
Ken Moses, a spokesman for Westrust, Sun Air's liquidator, said it would subpoena the department of public enterprises to explain its role in the airline's liquidation.
It is likely that senior ministry members, both past and present, will be quizzed over the decision to allow Comair, one of Sun Air's major competitors, to purchase a stake in the airline.
----------------------------------
SunAir's aircraft falling from the sky?
No ways Coleman!
------------------
It is much easier to ask for forgiveness than to ask for permission.
Pretoria - The inquiry into last year's failure of Sun Air heard yesterday that Johan Borslap, the airline's chief executive, had been ordered by Coleman Andrews, the chief executive of South African Airways (SAA), to proceed with the winding up of Sun Air.
SAA was neither a creditor nor a shareholder in Sun Air.
Andrews said the decision to close the airline had been taken because of safety concerns over the airline's fleet.
"Borslap told me he wanted to close Sun Air over safety concerns," Andrews told the inquiry 'there appeared to be a substantial risk that Sun Air aircraft would fall from the sky".
Senior counsel for the liquidators contended that Borslap was under the impression SAA had acquired control of Sun Air after meeting with Andrews on August10 last year, three days before Sun Air folded.
Andrews told Borslap that the deal in which SAA would acquire 75 percent of Sun Air would be discussed later that day with the department of public enterprises, which had to approve it.
But the meeting, where the deal was to be ratified, was postponed to August 13. On August12, however, Borslap returned to SAA's offices and was instructed by Andrews to close Sun Air down. Andrews had allegedly not informed Borslap whether the meeting with the government had taken place. Andrews admitted that SAA was at no point in control of Sun Air.
It also emerged yesterday that SAA had summonsed Safair, the aircraft leasing company to return R50 million that SAA had paid to the company in August last year. SAA contends that the money was paid in error. The R50 million had been paid to Safair to ensure that the aircraft it leased to Sun Air would not be released to a competitor within the Southern African Development Community. Andrews said the "broader transaction" had the approval of the SAA board.
The money however was only to have been paid if SAA's purchase of the stake in Sun Air was approved by the government.
Ken Moses, a spokesman for Westrust, Sun Air's liquidator, said it would subpoena the department of public enterprises to explain its role in the airline's liquidation.
It is likely that senior ministry members, both past and present, will be quizzed over the decision to allow Comair, one of Sun Air's major competitors, to purchase a stake in the airline.
----------------------------------
SunAir's aircraft falling from the sky?
No ways Coleman!
------------------
It is much easier to ask for forgiveness than to ask for permission.
Guest
Posts: n/a
Look at this, Guvnor. This was published in today's (1 Feb) Business Report. The Journo is Stewart Baily.
Pretoria - The inquiry into last year's failure of Sun Air heard yesterday that Johan Borslap, the airline's chief executive, had been ordered by Coleman Andrews, the chief executive of South African Airways (SAA), to proceed with the winding up of Sun Air.
SAA was neither a creditor nor a shareholder in Sun Air.
Andrews said the decision to close the airline had been taken because of safety concerns over the airline's fleet.
"Borslap told me he wanted to close Sun Air over safety concerns," Andrews told the inquiry 'there appeared to be a substantial risk that Sun Air aircraft would fall from the sky".
Senior counsel for the liquidators contended that Borslap was under the impression SAA had acquired control of Sun Air after meeting with Andrews on August10 last year, three days before Sun Air folded.
Andrews told Borslap that the deal in which SAA would acquire 75 percent of Sun Air would be discussed later that day with the department of public enterprises, which had to approve it.
But the meeting, where the deal was to be ratified, was postponed to August 13. On August12, however, Borslap returned to SAA's offices and was instructed by Andrews to close Sun Air down. Andrews had allegedly not informed Borslap whether the meeting with the government had taken place. Andrews admitted that SAA was at no point in control of Sun Air.
It also emerged yesterday that SAA had summonsed Safair, the aircraft leasing company to return R50 million that SAA had paid to the company in August last year. SAA contends that the money was paid in error. The R50 million had been paid to Safair to ensure that the aircraft it leased to Sun Air would not be released to a competitor within the Southern African Development Community. Andrews said the "broader transaction" had the approval of the SAA board.
The money however was only to have been paid if SAA's purchase of the stake in Sun Air was approved by the government.
Ken Moses, a spokesman for Westrust, Sun Air's liquidator, said it would subpoena the department of public enterprises to explain its role in the airline's liquidation.
It is likely that senior ministry members, both past and present, will be quizzed over the decision to allow Comair, one of Sun Air's major competitors, to purchase a stake in the airline.
----------------------------------
SunAir's aircraft falling from the sky?
No ways Coleman!
------------------
It is much easier to ask for forgiveness than to ask for permission.
Pretoria - The inquiry into last year's failure of Sun Air heard yesterday that Johan Borslap, the airline's chief executive, had been ordered by Coleman Andrews, the chief executive of South African Airways (SAA), to proceed with the winding up of Sun Air.
SAA was neither a creditor nor a shareholder in Sun Air.
Andrews said the decision to close the airline had been taken because of safety concerns over the airline's fleet.
"Borslap told me he wanted to close Sun Air over safety concerns," Andrews told the inquiry 'there appeared to be a substantial risk that Sun Air aircraft would fall from the sky".
Senior counsel for the liquidators contended that Borslap was under the impression SAA had acquired control of Sun Air after meeting with Andrews on August10 last year, three days before Sun Air folded.
Andrews told Borslap that the deal in which SAA would acquire 75 percent of Sun Air would be discussed later that day with the department of public enterprises, which had to approve it.
But the meeting, where the deal was to be ratified, was postponed to August 13. On August12, however, Borslap returned to SAA's offices and was instructed by Andrews to close Sun Air down. Andrews had allegedly not informed Borslap whether the meeting with the government had taken place. Andrews admitted that SAA was at no point in control of Sun Air.
It also emerged yesterday that SAA had summonsed Safair, the aircraft leasing company to return R50 million that SAA had paid to the company in August last year. SAA contends that the money was paid in error. The R50 million had been paid to Safair to ensure that the aircraft it leased to Sun Air would not be released to a competitor within the Southern African Development Community. Andrews said the "broader transaction" had the approval of the SAA board.
The money however was only to have been paid if SAA's purchase of the stake in Sun Air was approved by the government.
Ken Moses, a spokesman for Westrust, Sun Air's liquidator, said it would subpoena the department of public enterprises to explain its role in the airline's liquidation.
It is likely that senior ministry members, both past and present, will be quizzed over the decision to allow Comair, one of Sun Air's major competitors, to purchase a stake in the airline.
----------------------------------
SunAir's aircraft falling from the sky?
No ways Coleman!
------------------
It is much easier to ask for forgiveness than to ask for permission.
Guest
Posts: n/a
Good story, Nugpot!
One word sums this up - FRAUD!
Andrews might be a Yank, but he's certainly learnt how to do the Broederbond Shuffle pretty well!!
I wonder if anyone will end up in jail over this?? Nah ....
------------------
Happiness is VR at Lagos!
One word sums this up - FRAUD!
Andrews might be a Yank, but he's certainly learnt how to do the Broederbond Shuffle pretty well!!
I wonder if anyone will end up in jail over this?? Nah ....
------------------
Happiness is VR at Lagos!
Guest
Posts: n/a
The price SAA paid to buy and close down Flitestar may well have been well in excess of the R198m taxpayers money quoted. It would appear thet the Flitestar shareholders made a very tidy but undeserved profit in the whole affair. The fact that SAA used such "buy and liquidate" tactics to destroy opposition detracts from the fact that SAA paid way more for the airline than it was worth.
Another query which someone might wish to comment on is what is the family name of the majority shareholders of Safmarine/Safren at the time of the Flitestar transaction. And what was the maiden name of the wife of the then Minister of Transport.
Another query which someone might wish to comment on is what is the family name of the majority shareholders of Safmarine/Safren at the time of the Flitestar transaction. And what was the maiden name of the wife of the then Minister of Transport.
Guest
Posts: n/a
Regarding Coleman Andrews statement about Sun Air's aircraft about to fall from the sky. He once again exhibits an uncanny ability to deviate from the truth.
What did happen is that with evidence of an underhand deal emerging which would result in the loss of jobs, the morale of the pilots at Sun Air was at a terrible low. The MD Sun Air wrote to Andrews informing him that the uncertain situation had led to a low morale amongst aircrew which seriously impinged on flight safety and that he (Borstlap) could not guarantee the continued safe operations of the airline. In this statment he was quite right, though his motives are uncertain. He told Andrews something to the effect that the deal between Rethabele, other shareholders and SAA should be conclude ASAP and operations should cease as they were unsafe under these conditions of uncertainty and low morale.
Some people have interpreted this as Borstlap being part of the plot to close the airline down, but it is more likely that it was just himself covering his butt. Something he seems most adept at doing. What can be read into this letter and other actions of Borstlap was that he was well aware that the terms of negociations between SAA and Sun shareholders would result in the closure of the airline, or at the very least severely curtailing operations and job losses.
What did happen is that with evidence of an underhand deal emerging which would result in the loss of jobs, the morale of the pilots at Sun Air was at a terrible low. The MD Sun Air wrote to Andrews informing him that the uncertain situation had led to a low morale amongst aircrew which seriously impinged on flight safety and that he (Borstlap) could not guarantee the continued safe operations of the airline. In this statment he was quite right, though his motives are uncertain. He told Andrews something to the effect that the deal between Rethabele, other shareholders and SAA should be conclude ASAP and operations should cease as they were unsafe under these conditions of uncertainty and low morale.
Some people have interpreted this as Borstlap being part of the plot to close the airline down, but it is more likely that it was just himself covering his butt. Something he seems most adept at doing. What can be read into this letter and other actions of Borstlap was that he was well aware that the terms of negociations between SAA and Sun shareholders would result in the closure of the airline, or at the very least severely curtailing operations and job losses.
Guest
Posts: n/a
More on Sun Air.
A complaint has been lodged with the police office of Serious Economic Offences regarding Coleman Andrews role in the Sun Air saga.
A number of complaints have been lodged with the Complaints Commission (the new 3 tiered structure which took over from old Complaints Commission in Oct last year). These relate to the SAA behavior in the market and directly with regards Sun Air. They further relate to the activities and findings of the original Complaints Commission. The activities and findings of the original Commission regarding the complaints of alleged predatory behavior by SAA and with regards permitting the sale of Sun Air to SAA have been described as "bizzare" by more than one member of Parliament. It would seem that Dave Lewis, who headed the Commission, was either bought off or was incompetent.
The department of Public enterprises now dictances itself from these findings. A number of members of the Dept. of Transport's licencing councils vehemently disagree with them, and the new Complaints structure has admitted the need to take a closer look at the matter.
A complaint has been lodged with the police office of Serious Economic Offences regarding Coleman Andrews role in the Sun Air saga.
A number of complaints have been lodged with the Complaints Commission (the new 3 tiered structure which took over from old Complaints Commission in Oct last year). These relate to the SAA behavior in the market and directly with regards Sun Air. They further relate to the activities and findings of the original Complaints Commission. The activities and findings of the original Commission regarding the complaints of alleged predatory behavior by SAA and with regards permitting the sale of Sun Air to SAA have been described as "bizzare" by more than one member of Parliament. It would seem that Dave Lewis, who headed the Commission, was either bought off or was incompetent.
The department of Public enterprises now dictances itself from these findings. A number of members of the Dept. of Transport's licencing councils vehemently disagree with them, and the new Complaints structure has admitted the need to take a closer look at the matter.
Guest
Posts: n/a
Leber - terribly interesting information that - are you saying that our late and unlamented Minister of Transport, Dr Piet J Welgemoed might be related to Joggie Vermooten? Poor chap!!
I was CEO of Lionair at the time, and had been in negotiations with Derek Lawrence and Buddy Hawton since October 1993 regarding the amalgamation of the various operations. The game plan was that they would buy the Rentmeester Beleggings holdings, return the A320s to GPA; replace them with B727s in all-business configuration (like the old British Midland Diamond Service). We would operate B727s in cattle-class configuration; and Safair would operate B727 freighters - that would give us commonality in spares, training, etc etc.
I started to get fobbed off by them in March, and sent a fax to Buddy, copied to Derek, on the 10th April 1994 - as I'd heard a few rumours about the shutdown. They both said that things were on course, and I should hold on. At the same time, I obtained a 'Deep Throat' within the Safren heirarchy who told me:
a) The airline would be closed down the following day
b) The company had agreed to return the A320s to GPA in JANUARY(!!) and that they had now been placed with Vietnam Airlines - consequently GPA was not going to hit them for damages.
c) SAA had agreed with the Trek Airways (Pty) Ltd shareholders (Rentmeester, Safren and the de Moelenaer family) that they would be paid R198m to 'cease operating any airline service in competition with the State Airline' for a period of five years. This was one of the reasons Safair had to shut down its cargo operation - which was using 146's at the time - because it counted as an airline service competing with SAA.
On the 11th, following the closure of Flitestar, I put out a press release to every newspaper and TV station in South Africa. Within 30 minutes, I received a fax from Rentmeester's attorneys - some outfit in Pretoria with a name like Wildebeeste van der Merwe denying absolutely that any of this was true; saying that my release was full of factual errors. When challenged on this, they said that I had said that Jan Blake was at Premier Milling when in fact he was at Tiger Oats (or vice versa, I can't remember!) - so I put out a further release correcting it.
Anyway, this dragged on for a further couple of days, and Hawton eventually admitted the whole thing on th 8pm SABC news. Shortly afterwards, I received a further fax from Wildebeeste van der Merwe saying they had ben istructed by their clients to sue me for libel and defamation - I replied saying that they were flogging a dead horse as one of their client's biggest shareholders had admitted the whole thing to an audience of millions and can I have an apology, please?
Needless to say, I am still waiting!
Incidentally, as a footnote, Rennies Travel owns Trek Airways now - it's the company that they used to rent their Premier Club lounges at JNB, DUR and CPT.
The whole think smacked of the ABSA/Trust Bank type attitude of "we are big and well connected and we can do whatever we want to whoever we want".
I discussed the whole thing with Martin Weitz at Noseweek a few years back - and even he thought that as potatoes go, this was a hot one - but if we could get documentary proof (which I wasn't able to do as I had lost touch with 'Deep Throat' in the interim) then he could blow it out of the water.
Under new, non Broederbond/Mason control, one would think that SAA was clean. Nope. First, you have the affirmative 'jobs for the boys'. Then you have mega-scale fraud and theft going on - how many hundred million rands/dollars worth of spares - including engines!! - have 'walked' from SAA Technical? Then there was the infamous SAA Cargo scandal where everyone was nicked in dawn raids by the Office of Serious Economic Offences - and it was discovered that an alleges 'client' - Morgan Air Services - was in fact owned and controlled by SAA Cargo staff, who were passing on all the juicy contracts and leasing capacity at cost or below - such as the fish flights from CPT to VIT.
One wonders if Swissair knew this sort of stuff before they bought their holdings in SAA - and if they did, how does that reflect on that well known Swiss probity?
------------------
Happiness is VR at Lagos!
I was CEO of Lionair at the time, and had been in negotiations with Derek Lawrence and Buddy Hawton since October 1993 regarding the amalgamation of the various operations. The game plan was that they would buy the Rentmeester Beleggings holdings, return the A320s to GPA; replace them with B727s in all-business configuration (like the old British Midland Diamond Service). We would operate B727s in cattle-class configuration; and Safair would operate B727 freighters - that would give us commonality in spares, training, etc etc.
I started to get fobbed off by them in March, and sent a fax to Buddy, copied to Derek, on the 10th April 1994 - as I'd heard a few rumours about the shutdown. They both said that things were on course, and I should hold on. At the same time, I obtained a 'Deep Throat' within the Safren heirarchy who told me:
a) The airline would be closed down the following day
b) The company had agreed to return the A320s to GPA in JANUARY(!!) and that they had now been placed with Vietnam Airlines - consequently GPA was not going to hit them for damages.
c) SAA had agreed with the Trek Airways (Pty) Ltd shareholders (Rentmeester, Safren and the de Moelenaer family) that they would be paid R198m to 'cease operating any airline service in competition with the State Airline' for a period of five years. This was one of the reasons Safair had to shut down its cargo operation - which was using 146's at the time - because it counted as an airline service competing with SAA.
On the 11th, following the closure of Flitestar, I put out a press release to every newspaper and TV station in South Africa. Within 30 minutes, I received a fax from Rentmeester's attorneys - some outfit in Pretoria with a name like Wildebeeste van der Merwe denying absolutely that any of this was true; saying that my release was full of factual errors. When challenged on this, they said that I had said that Jan Blake was at Premier Milling when in fact he was at Tiger Oats (or vice versa, I can't remember!) - so I put out a further release correcting it.
Anyway, this dragged on for a further couple of days, and Hawton eventually admitted the whole thing on th 8pm SABC news. Shortly afterwards, I received a further fax from Wildebeeste van der Merwe saying they had ben istructed by their clients to sue me for libel and defamation - I replied saying that they were flogging a dead horse as one of their client's biggest shareholders had admitted the whole thing to an audience of millions and can I have an apology, please?
Needless to say, I am still waiting!
Incidentally, as a footnote, Rennies Travel owns Trek Airways now - it's the company that they used to rent their Premier Club lounges at JNB, DUR and CPT.
The whole think smacked of the ABSA/Trust Bank type attitude of "we are big and well connected and we can do whatever we want to whoever we want".
I discussed the whole thing with Martin Weitz at Noseweek a few years back - and even he thought that as potatoes go, this was a hot one - but if we could get documentary proof (which I wasn't able to do as I had lost touch with 'Deep Throat' in the interim) then he could blow it out of the water.
Under new, non Broederbond/Mason control, one would think that SAA was clean. Nope. First, you have the affirmative 'jobs for the boys'. Then you have mega-scale fraud and theft going on - how many hundred million rands/dollars worth of spares - including engines!! - have 'walked' from SAA Technical? Then there was the infamous SAA Cargo scandal where everyone was nicked in dawn raids by the Office of Serious Economic Offences - and it was discovered that an alleges 'client' - Morgan Air Services - was in fact owned and controlled by SAA Cargo staff, who were passing on all the juicy contracts and leasing capacity at cost or below - such as the fish flights from CPT to VIT.
One wonders if Swissair knew this sort of stuff before they bought their holdings in SAA - and if they did, how does that reflect on that well known Swiss probity?
------------------
Happiness is VR at Lagos!
Guest
Posts: n/a
The Swiss have NO qualms about dodgy dealings. They paint a pretty picture of squeaky-clean accountability, yet they have hoarded the BILLIONS from nazi-era Germany when they KNEW it's source, and that millions of Jews who died at the hands of the nazis were the rightful owners. Integrity? Swiss? HA!!
Guest
Posts: n/a
As far as Vernon and Nationwide are concerned, enough of a stink has been raised by various people over the Sun Air issue to give Nationwide holy cow status. The Competitions Board is in new hands, the ethics of which are beyond reproach, and which is keeping more than a beady eye on the activities of SAA and Comair. The DOT licencing councils are playing very much by the book with definately no favouritism given to SAA. Times have certainly changed. I have had numerous discussions with them and chances to enlighten them on the Sun Air circumstances.
Of Comair, they are in a better situation than ever before. Anyone who thinks that SAA pulled off this plot on their own probably believes that Coleman Andrews is innocent of any wrongdoing as well. If that is you, I doubt if you entered this website unassisted. Comair attempted to sell their 25% shareholding to SAA days/weeks before Sun Air's closure. They then entered discussions with SAA the contents of which one can only speculate, save to say that Comair relinquished their pre-emptive rights to purchase the other shareholders shares provided that they sold to SAA. There is no doubt that Comair knew that SAA would close the airline down and in fact desired it. In fact the Complaints Commission (now disbanded) only approved the sale if it was to be liquidated....bizare... At the first Sun Air shareholders meeting Comair actually proposed that Sun Air be liquidated volentarily. They quickly withdrew this proposal when legal council at the meeting explained the implications of proposing such a motion. I and the MD Sun Air were taken to task by Comair for revealing this fact. Comair's intentions for Sun Air were nevertheless made clear from the outset. When Comair gives their account of their involvement in Sun Air it is of course a one sided account which often neglects to mention some of the salient facts. For instance their proposal to merge Sun Air into one company was so grossly prejudicial to the rest of Sun Air shareholders that it was obviously unacceptable (I - lone sole - actually supported the merger at the time as I could see that without it Sun Air would be precariously positioned). The merger, almost a condition of privatisation, never took place. Comair used this as one of their excuses when explaining Sun Air's commercial ills. the "well we tried" excuse...yes but how hard. The truth is that any effort on the part of the Sun Air board to make commercial decisions to ensure the growth and success of Sun Air (eg expansion/diversificaation of routes, purchase of a/c etc) was thwarted at board level by the Comair/CNI contingent. This left Sun Air vulnerable to a SAA seat dumping exercise as seats were specifically dumped on the routes on which which Sun Air concentrated (CT, DN, JHB). The other airlines were not so adversely affected as their route diversification was somewhat more diverse. This was a fact explored and established in a DOT Licencing Council enqirey into Sun Air's cessation of operations. From the actions of both SAA and Comair since the closure of Sun Air it is almost impossible to believe that SAA and Comair did not forge some sort of an allience and agree to ensure Sun Air's demise and slice up the cake.
It is now common knowlege that Nationwide was presented a document to which Vernon was asked to be party to an agreement whereby Comair and SAA would slice up the cake and basically Vernon would be allowed to survive but (obviously to him) on crumbs. To his credit, he did not agree to this proposal (to my understanding despite ...for want of a better word... threats ...that his airline would follow Sun Air).
It is a fact that the rest of the Sun Air shareholders/shareholder directors were incompetent (except perhaps one Rethabele board member who warned the rest and was relieved of his post for his efforts) and the MD was way out of his depth, but the airline at it's closure was quite capable of being turned round in a very short space of time by competent management....even without recapitalisation. The spotlight on the SAA dealings was intensifying, and the price war was over. SAA could in fact not afford to continue with losses incurred in plotting Sun Air's demise for any longer into that financial year. Further SAA losses could not be as easily hidden as previously, (you will note that despite claims that they were running at a profit they later in fact admitted an over 100m rand loss), and the privatisation process had to go on whether SAA completed their elimination of Sun or not. The CNI and Comair appointees resigned from the Sun Board and were unlikely to take up their posts again. It remained for someone to buy the shares (KLM/Virgin ???). Now that is something Coleman Andrews was terrified of.....The airline was in enough good shape to scare him into ensuring it's demise under SAA control...ie buy it. Remember 3 months before Sun's closure Virgin had made a substantial offer for 25% of Suns shares. Comair thwarted this effort, and Rethabele tried to use this to play the field in a greedy attempt to make more. Coleman was quite right (as reflected in the SAA Board minutes). It was quite a strong possibility that a KLM or Virgin could buy the airline out of liquidation without the shareholders or SAA/Comair being able to do a damn thing about it (Judicial decision in the best interests of the employees and creditors). In fact Coleman knew that was the plan. So much for Coleman's continued misleading (to the ignorant public) allegations that it was obvious that Sun Air would have to close doors....Far from it. Despite being ill, it was market and operationally poised for enormous expansion and revitalisation.
The real nail in the coffin came with Government's attitude. It appeared (rightly or wrongly - you be the judge) that Government was in fact party to the demise of Sun Air. A sacrificial lamb to ensure the increase in value - and a handsome reward in the SAA privatisation stakes. Who knows, perhaps Government had every intention of allowing SAA to purchase Sun as planned, allowing a quiet winding up and achievement of all SAA and Comair objectives, but a party of employees got hold of a copy of the orriginal Share Sale Agreement and some other embarassing facts which caused them to reconsidder. The **** hit the fan.
What investor is going to go into the foray with Government's intentions so blatently obvious. Sun Air was a very attractive asset to buy...even out of liquidation. Those who had access to the real financial status of the airline were pleasantly surprised, compared to Comair and SAA's negative allegations...who was to know that a group of employees was going to access the books and that the evential liquidators would not be tame SAA appointees.
Rethabele just didn't have the nerve to talk on SAA from the start to end. If they had, they would have weathered the storm and survived. Now they have lost everything, with a R9m still to pay Gvmt for the original purchase of shares. By the time they eventially agreed to sell their shares to competent investors and the Staff consortium, the consortium had decided to aquire them by other means.
Instead of conducting business they (Rethabele) followed Borstlap into politicing with Andrews. I personally warned them (Borstlap and Makado) that they were being led up the garden path by Andrews. But they know more about business than I do. Weeks before I told a disbelieving body of pilots at Sun Air that I suspected that we were being sold into liquidation. If I could see it, and I was personna non gratia in the management circles, what the hell was Borstlap doing...blind, incompetent, or party to it all. He claims to have been excluded from the later negotiations. So that leaves Sheiks having the wool pulled over hs eyes alone. When you want to be important and be the boss....you better have balls and ability...not something in big supply at Sun Air.
Indecision, fence sitting, bet hedging and looking after personal position instead of just running the damn company with competence and good business sense. The Borstlap/Rethabele alliance (however fragile and strained) jointly and falsely still believed that they could still conduct business the Broederbond/Black Nepotism/Politically connected way.
Any questions.
Of Comair, they are in a better situation than ever before. Anyone who thinks that SAA pulled off this plot on their own probably believes that Coleman Andrews is innocent of any wrongdoing as well. If that is you, I doubt if you entered this website unassisted. Comair attempted to sell their 25% shareholding to SAA days/weeks before Sun Air's closure. They then entered discussions with SAA the contents of which one can only speculate, save to say that Comair relinquished their pre-emptive rights to purchase the other shareholders shares provided that they sold to SAA. There is no doubt that Comair knew that SAA would close the airline down and in fact desired it. In fact the Complaints Commission (now disbanded) only approved the sale if it was to be liquidated....bizare... At the first Sun Air shareholders meeting Comair actually proposed that Sun Air be liquidated volentarily. They quickly withdrew this proposal when legal council at the meeting explained the implications of proposing such a motion. I and the MD Sun Air were taken to task by Comair for revealing this fact. Comair's intentions for Sun Air were nevertheless made clear from the outset. When Comair gives their account of their involvement in Sun Air it is of course a one sided account which often neglects to mention some of the salient facts. For instance their proposal to merge Sun Air into one company was so grossly prejudicial to the rest of Sun Air shareholders that it was obviously unacceptable (I - lone sole - actually supported the merger at the time as I could see that without it Sun Air would be precariously positioned). The merger, almost a condition of privatisation, never took place. Comair used this as one of their excuses when explaining Sun Air's commercial ills. the "well we tried" excuse...yes but how hard. The truth is that any effort on the part of the Sun Air board to make commercial decisions to ensure the growth and success of Sun Air (eg expansion/diversificaation of routes, purchase of a/c etc) was thwarted at board level by the Comair/CNI contingent. This left Sun Air vulnerable to a SAA seat dumping exercise as seats were specifically dumped on the routes on which which Sun Air concentrated (CT, DN, JHB). The other airlines were not so adversely affected as their route diversification was somewhat more diverse. This was a fact explored and established in a DOT Licencing Council enqirey into Sun Air's cessation of operations. From the actions of both SAA and Comair since the closure of Sun Air it is almost impossible to believe that SAA and Comair did not forge some sort of an allience and agree to ensure Sun Air's demise and slice up the cake.
It is now common knowlege that Nationwide was presented a document to which Vernon was asked to be party to an agreement whereby Comair and SAA would slice up the cake and basically Vernon would be allowed to survive but (obviously to him) on crumbs. To his credit, he did not agree to this proposal (to my understanding despite ...for want of a better word... threats ...that his airline would follow Sun Air).
It is a fact that the rest of the Sun Air shareholders/shareholder directors were incompetent (except perhaps one Rethabele board member who warned the rest and was relieved of his post for his efforts) and the MD was way out of his depth, but the airline at it's closure was quite capable of being turned round in a very short space of time by competent management....even without recapitalisation. The spotlight on the SAA dealings was intensifying, and the price war was over. SAA could in fact not afford to continue with losses incurred in plotting Sun Air's demise for any longer into that financial year. Further SAA losses could not be as easily hidden as previously, (you will note that despite claims that they were running at a profit they later in fact admitted an over 100m rand loss), and the privatisation process had to go on whether SAA completed their elimination of Sun or not. The CNI and Comair appointees resigned from the Sun Board and were unlikely to take up their posts again. It remained for someone to buy the shares (KLM/Virgin ???). Now that is something Coleman Andrews was terrified of.....The airline was in enough good shape to scare him into ensuring it's demise under SAA control...ie buy it. Remember 3 months before Sun's closure Virgin had made a substantial offer for 25% of Suns shares. Comair thwarted this effort, and Rethabele tried to use this to play the field in a greedy attempt to make more. Coleman was quite right (as reflected in the SAA Board minutes). It was quite a strong possibility that a KLM or Virgin could buy the airline out of liquidation without the shareholders or SAA/Comair being able to do a damn thing about it (Judicial decision in the best interests of the employees and creditors). In fact Coleman knew that was the plan. So much for Coleman's continued misleading (to the ignorant public) allegations that it was obvious that Sun Air would have to close doors....Far from it. Despite being ill, it was market and operationally poised for enormous expansion and revitalisation.
The real nail in the coffin came with Government's attitude. It appeared (rightly or wrongly - you be the judge) that Government was in fact party to the demise of Sun Air. A sacrificial lamb to ensure the increase in value - and a handsome reward in the SAA privatisation stakes. Who knows, perhaps Government had every intention of allowing SAA to purchase Sun as planned, allowing a quiet winding up and achievement of all SAA and Comair objectives, but a party of employees got hold of a copy of the orriginal Share Sale Agreement and some other embarassing facts which caused them to reconsidder. The **** hit the fan.
What investor is going to go into the foray with Government's intentions so blatently obvious. Sun Air was a very attractive asset to buy...even out of liquidation. Those who had access to the real financial status of the airline were pleasantly surprised, compared to Comair and SAA's negative allegations...who was to know that a group of employees was going to access the books and that the evential liquidators would not be tame SAA appointees.
Rethabele just didn't have the nerve to talk on SAA from the start to end. If they had, they would have weathered the storm and survived. Now they have lost everything, with a R9m still to pay Gvmt for the original purchase of shares. By the time they eventially agreed to sell their shares to competent investors and the Staff consortium, the consortium had decided to aquire them by other means.
Instead of conducting business they (Rethabele) followed Borstlap into politicing with Andrews. I personally warned them (Borstlap and Makado) that they were being led up the garden path by Andrews. But they know more about business than I do. Weeks before I told a disbelieving body of pilots at Sun Air that I suspected that we were being sold into liquidation. If I could see it, and I was personna non gratia in the management circles, what the hell was Borstlap doing...blind, incompetent, or party to it all. He claims to have been excluded from the later negotiations. So that leaves Sheiks having the wool pulled over hs eyes alone. When you want to be important and be the boss....you better have balls and ability...not something in big supply at Sun Air.
Indecision, fence sitting, bet hedging and looking after personal position instead of just running the damn company with competence and good business sense. The Borstlap/Rethabele alliance (however fragile and strained) jointly and falsely still believed that they could still conduct business the Broederbond/Black Nepotism/Politically connected way.
Any questions.
Guest
Posts: n/a
Leber - a first class summation there - well done. Cast your mind back 18 years ago this month and you have exactly the same thing that happened to Freddie Laker.
Personally, I feel that the so-called 'empowerment' companies such as Thebe Investments (which owns SAX and belongs to the ANC - Thabo Mbeki is/was a trustee) and Rethabile are an absolute scam, usually being set up by well connected ANC 'cadres' and being financed by the major banks eager to keep their sticky fingers in various pies. They are reminiscent of the worst excesses of the Nats - such as the Trust Bank 'lifeboat' using taxpayers money offered by none other than our late and unlamented Governor of the Reserve Bank, Chris Stals. Indeed, one European Central Bank head once described ABSA as "more corrupt than BCCI" - and that's saying something!
On the subject of bankers, Kubota, one of my favourite ads in terms of incredibly inept PR management was ABSA's ad showing a 'retired Swiss banker' saying "I love Absa. They make me feel as if I was right at home". Given that it came out at the same time as the revelations about the Jewish accounts, what does *that* say about ABSA?
It will be interesting to see what happens with Vernon and his application to fly to London. As we all know, African disaStar was given its approvals in double-quick time - despite the fact that its CEO, Ben Kirama (which isn't his real name anyway - see the African Star thread)- is still out on bail on a multi-hundred million rand VAT fraud charge. Vernon was refused permission to wet lease a Virgin A340 on the somewhat 'iffy' grounds that he was just fronting for VS and that they were trying to get extra frequencies via the back door.
Vernon was absolutely right to decline the SA/MN 'carve-up': Rodger Foster was offered a similar deal if he helped SA get rid of Flitestar (which was the reason he bought the ATR42s) but instead SA shafted him and brought in Bill Deluce and the ANC (through Thebe Investments) in the form of SAX. Rodger and Barry have now been relegated to third place at the SAA table with SA Airlink and the Jetstream 41s.
Looking on the bright side, though, SA must be running scared now that BA has bought shares in MN. It is ironic that MN, which was SA's 'Frankenstein's Monster' in the form of Citijet - created by SA to attack Flitestar, with cheap aircraft and crews - is now SA's strongest competitor.
And there, I think, was the real reason BV was murdered - neither MN nor SA really wanted or could handle a 'Virgin South Africa'.
Unfortunately, if the OSEO goes after Andrews, it's also going to have to go after Sheiks, Bert van der Linden, Piet van der Hoeven, Nik Vlok, etc etc. Bortlap appears to have just been grossly incompetent, but hey, we've got plenty of precendent for that in SA - Gert van der Veer, Jan Blake, etc etc!
------------------
Happiness is VR at Lagos!
Personally, I feel that the so-called 'empowerment' companies such as Thebe Investments (which owns SAX and belongs to the ANC - Thabo Mbeki is/was a trustee) and Rethabile are an absolute scam, usually being set up by well connected ANC 'cadres' and being financed by the major banks eager to keep their sticky fingers in various pies. They are reminiscent of the worst excesses of the Nats - such as the Trust Bank 'lifeboat' using taxpayers money offered by none other than our late and unlamented Governor of the Reserve Bank, Chris Stals. Indeed, one European Central Bank head once described ABSA as "more corrupt than BCCI" - and that's saying something!
On the subject of bankers, Kubota, one of my favourite ads in terms of incredibly inept PR management was ABSA's ad showing a 'retired Swiss banker' saying "I love Absa. They make me feel as if I was right at home". Given that it came out at the same time as the revelations about the Jewish accounts, what does *that* say about ABSA?
It will be interesting to see what happens with Vernon and his application to fly to London. As we all know, African disaStar was given its approvals in double-quick time - despite the fact that its CEO, Ben Kirama (which isn't his real name anyway - see the African Star thread)- is still out on bail on a multi-hundred million rand VAT fraud charge. Vernon was refused permission to wet lease a Virgin A340 on the somewhat 'iffy' grounds that he was just fronting for VS and that they were trying to get extra frequencies via the back door.
Vernon was absolutely right to decline the SA/MN 'carve-up': Rodger Foster was offered a similar deal if he helped SA get rid of Flitestar (which was the reason he bought the ATR42s) but instead SA shafted him and brought in Bill Deluce and the ANC (through Thebe Investments) in the form of SAX. Rodger and Barry have now been relegated to third place at the SAA table with SA Airlink and the Jetstream 41s.
Looking on the bright side, though, SA must be running scared now that BA has bought shares in MN. It is ironic that MN, which was SA's 'Frankenstein's Monster' in the form of Citijet - created by SA to attack Flitestar, with cheap aircraft and crews - is now SA's strongest competitor.
And there, I think, was the real reason BV was murdered - neither MN nor SA really wanted or could handle a 'Virgin South Africa'.
Unfortunately, if the OSEO goes after Andrews, it's also going to have to go after Sheiks, Bert van der Linden, Piet van der Hoeven, Nik Vlok, etc etc. Bortlap appears to have just been grossly incompetent, but hey, we've got plenty of precendent for that in SA - Gert van der Veer, Jan Blake, etc etc!
------------------
Happiness is VR at Lagos!
Guest
Posts: n/a
The Sun Air liquidators seem to be doing a fine job. It has been suggested to them that they get the court's hands on the original agreements and documentation between SAA and Swissair as there just might be some reference there which would suggest the conclusion of the deal between SAA and Swissair being contingent on (amongst other stipulations) something which effectively amounts to SAA (and by inference Gvmt) getting rid of Sun Air. If so it would be hard to believe that the Government was not at least tacitly condoning SAA's actions.
The liquidators would do well to check the relationship between SAA and a company which fronted itself as representing an investor interested in bankrolling the Staff initiative to refloat the airline. It is quite likely that SAA paid this company to (amongst other things) get the inside track on the Staff Consortium's business plan, strategy and to distract and mislead them. This would, if true, surely amount to industrial espionage.
The liquidators would do well to check the relationship between SAA and a company which fronted itself as representing an investor interested in bankrolling the Staff initiative to refloat the airline. It is quite likely that SAA paid this company to (amongst other things) get the inside track on the Staff Consortium's business plan, strategy and to distract and mislead them. This would, if true, surely amount to industrial espionage.
Guest
Posts: n/a
Correction to a few of my past references. When I used the term Complaint's Commission I of course was refering to the Competition's Board as headed by Dave Lewis.
The same Board that never did anything about the Comair/Sun Air and Nationwide complaint about SAA's seat dumping tactics. The board that found that if SAA bought Sun Air and liquidated it that if would not be anti-competative. SAA has and always did have a monopoly on the domestic route. In their own Board Room minutes Coleman stated that SAA could expect to pick up 75% of Sun Air's traffic if this transpired. This would increase SAA's (already commanding monopoly) from some 60 something percent to well into the 70 % bracket. Any idiot knows that such a monopoly has to be anti-competative and that this in conjunction with SAA's long precident of anti-competative actions, and the already pending seat dumping complaint, makes it even more unbelievewable that any rational person (without other motives) could not see that the closure of Sun Air would lead to an anti-competative industry and a controlled duopoly forming. Add to this the fact that the Competition's board had been informed of the proposal made to Vernon Bricknal of Nationwide (where SAA and Comair proposed to slice up the market after Sun Air's demise -Sun Air was not yet closed -note) and can anyone believe that this was going to be in the interests of the consumer and result in fair competition.
Now the Boards findings found that the market could not support 4 airlines. Apart from SAA and Comair (and a few shaky correspondents touting themselves as aviation experts) this is not the sentiment of the aviation community as a whole. As one real aviation expert (who sit's on the DOT's Licencing Council) stated - who is to say that 6 Airlines cannot be accomodated providing SAA's monopoly can be broken.
Well a Virgin/KLM foothold in th SA domestic/regional market could well have broken that hold. Of course the only airline that has been operating at a loss in the past few years has been SAA.....which Andrews, is, was and with fair competition (and without employing most of Sun Air's Cabin Attendants) always would be a SICK COMPANY. But no-one closed down SAA .....by airline terms a far more liquid company than Sun Air. But Andrews justifies a few months of losses (after SAA's years of the same) as justification to close Sun Air down. But I waste my time...I do not believe anyone believes his warped rhetoric anyway. He must be pretty stupid to believe anyone but his own cronies does believe him...and can you believe it some of them do.
Of course if one inspects any closer, one finds that the only information and parties consulted or considered by the Board were the Shareholders (who obviously wanted to sell the company - or/and didn't care if it was closed down) - and the report prepared by Bain & Co. Bain & Co. is an American consultancy firm, basically brought into the country by Coleman as consultents to SAA and rumoured to have Colemen Andrews as a founder member, or past member in any case.
No other interested party, or the public were represented or consulted. Pretty much a suspect one sided affair.
Nothing left to say that no-one I have spoken to - and that is a lot of people in Government and the industry - save for Comair and SAA and Dave Lewis himself, agree with the Boards findings.
On the SAA claims of innocence etc. on the Seat Dumping, anti-competitive allegations and complaints.
SAA claims that the Competition's Board found no substance in the allegations. I had a letter read to me by the MD Comair which said that the CB "....found prima facia evidence to support the allegations". By the time this letter was composed by the Board....months after the initial complaint had lodged, with Sun Air suffering losses due to the incompetence and inertia of the CB, Sun Air had commenced negotiations with SAA. As it transpired, injudiciously dancing with the devil. But with no recourse seemingly pending from the CB, one can mitigate this action.
Sun Air, as principle complainant dropped it's complaint (and Comair and Nationwide in the process) when Andrews said that he couldn't conduct negotiations with Sun Air if it continued with its complaint. Sun Air directors and shareholders walked straight into the lion's mouth after feeding it.
Despite the evidence the CB still didn't do anything about the matter, but suggested that the parties SAA, Comair and Nationwide meet to try and resolve the matter. Bound to be really effective Mr. Lewis.
Well SAA and Comair did meet. Not quite as Lewis anticipated. Comair allowed the SAA plan to go ahead, Sun Air was closed down. Fares were increased to profitable (lucrative) levels, the remaining airlines picked up the traffic, Comair dropped it's complaint and everyone made a killing.
Rethabele might not have been doing much of a job running Sun Air. They might have been greedy and naive to deal with SAA when other airlines and investors had offered to buy their shares. But it was the ineptitude, inertia and lack of action of the Competition's Board that prompted the battle weary Rethabele shareholders (already struggling with hostile Comair controlled co-directors) to abandon their dream of owning the only black airline in SA. They could have done better, but under the circumstances, it was not easy.
The same Board that never did anything about the Comair/Sun Air and Nationwide complaint about SAA's seat dumping tactics. The board that found that if SAA bought Sun Air and liquidated it that if would not be anti-competative. SAA has and always did have a monopoly on the domestic route. In their own Board Room minutes Coleman stated that SAA could expect to pick up 75% of Sun Air's traffic if this transpired. This would increase SAA's (already commanding monopoly) from some 60 something percent to well into the 70 % bracket. Any idiot knows that such a monopoly has to be anti-competative and that this in conjunction with SAA's long precident of anti-competative actions, and the already pending seat dumping complaint, makes it even more unbelievewable that any rational person (without other motives) could not see that the closure of Sun Air would lead to an anti-competative industry and a controlled duopoly forming. Add to this the fact that the Competition's board had been informed of the proposal made to Vernon Bricknal of Nationwide (where SAA and Comair proposed to slice up the market after Sun Air's demise -Sun Air was not yet closed -note) and can anyone believe that this was going to be in the interests of the consumer and result in fair competition.
Now the Boards findings found that the market could not support 4 airlines. Apart from SAA and Comair (and a few shaky correspondents touting themselves as aviation experts) this is not the sentiment of the aviation community as a whole. As one real aviation expert (who sit's on the DOT's Licencing Council) stated - who is to say that 6 Airlines cannot be accomodated providing SAA's monopoly can be broken.
Well a Virgin/KLM foothold in th SA domestic/regional market could well have broken that hold. Of course the only airline that has been operating at a loss in the past few years has been SAA.....which Andrews, is, was and with fair competition (and without employing most of Sun Air's Cabin Attendants) always would be a SICK COMPANY. But no-one closed down SAA .....by airline terms a far more liquid company than Sun Air. But Andrews justifies a few months of losses (after SAA's years of the same) as justification to close Sun Air down. But I waste my time...I do not believe anyone believes his warped rhetoric anyway. He must be pretty stupid to believe anyone but his own cronies does believe him...and can you believe it some of them do.
Of course if one inspects any closer, one finds that the only information and parties consulted or considered by the Board were the Shareholders (who obviously wanted to sell the company - or/and didn't care if it was closed down) - and the report prepared by Bain & Co. Bain & Co. is an American consultancy firm, basically brought into the country by Coleman as consultents to SAA and rumoured to have Colemen Andrews as a founder member, or past member in any case.
No other interested party, or the public were represented or consulted. Pretty much a suspect one sided affair.
Nothing left to say that no-one I have spoken to - and that is a lot of people in Government and the industry - save for Comair and SAA and Dave Lewis himself, agree with the Boards findings.
On the SAA claims of innocence etc. on the Seat Dumping, anti-competitive allegations and complaints.
SAA claims that the Competition's Board found no substance in the allegations. I had a letter read to me by the MD Comair which said that the CB "....found prima facia evidence to support the allegations". By the time this letter was composed by the Board....months after the initial complaint had lodged, with Sun Air suffering losses due to the incompetence and inertia of the CB, Sun Air had commenced negotiations with SAA. As it transpired, injudiciously dancing with the devil. But with no recourse seemingly pending from the CB, one can mitigate this action.
Sun Air, as principle complainant dropped it's complaint (and Comair and Nationwide in the process) when Andrews said that he couldn't conduct negotiations with Sun Air if it continued with its complaint. Sun Air directors and shareholders walked straight into the lion's mouth after feeding it.
Despite the evidence the CB still didn't do anything about the matter, but suggested that the parties SAA, Comair and Nationwide meet to try and resolve the matter. Bound to be really effective Mr. Lewis.
Well SAA and Comair did meet. Not quite as Lewis anticipated. Comair allowed the SAA plan to go ahead, Sun Air was closed down. Fares were increased to profitable (lucrative) levels, the remaining airlines picked up the traffic, Comair dropped it's complaint and everyone made a killing.
Rethabele might not have been doing much of a job running Sun Air. They might have been greedy and naive to deal with SAA when other airlines and investors had offered to buy their shares. But it was the ineptitude, inertia and lack of action of the Competition's Board that prompted the battle weary Rethabele shareholders (already struggling with hostile Comair controlled co-directors) to abandon their dream of owning the only black airline in SA. They could have done better, but under the circumstances, it was not easy.
Guest
Posts: n/a
Correction to my previous posting. When refered to SAA being more solvent than Sun Air, I of course meant more Insolvent. In fact Sun Air was SOLVENT at the time of it's closure. Ask the liquidators.
I am sure I am boring anyone who may still be ploughing through this, but I want to just clarify something. Some people have said that Sun Air, although not yet in serious financial trouble, could not survive any longer against the seat dumping and price waring. This IS what REHABELE must have thought, and prompted them to up sticks and get out. They had already had a huge cash reserve substantially depleted while weathering the storm. Although even before Sun Air closed there were signs that the price war was over (fare increase 2 weeks prior) it has been suggested that this was only because the end of Sun was already assured and SAA having achieved it's objectives could now stop it's wars and start to turn a profit. Not true. Season increases in traffic had commenced and the effectiveness of the war and seat dumping was comming to an end, load factors at Sun were impressive in the last month.
AND SAA could themselves not continue with the price war. They had to put up fares otherwise their year end figures, even after doctoring to make Coleman good, were going to be abysmal. This would not hail well with the public, elements of Government, or the SAA privatisation process.
There are those who thought that this carefully devised plan of Andrew's was really clever. Actually, it was, when it was first used years ago. But he really just got lucky with his timing, and things didn't all go according to plan. There was a lot he didn't figure on, and the fact that all the domino's fell his way was less by foresight and planning than by design.
I am sure I am boring anyone who may still be ploughing through this, but I want to just clarify something. Some people have said that Sun Air, although not yet in serious financial trouble, could not survive any longer against the seat dumping and price waring. This IS what REHABELE must have thought, and prompted them to up sticks and get out. They had already had a huge cash reserve substantially depleted while weathering the storm. Although even before Sun Air closed there were signs that the price war was over (fare increase 2 weeks prior) it has been suggested that this was only because the end of Sun was already assured and SAA having achieved it's objectives could now stop it's wars and start to turn a profit. Not true. Season increases in traffic had commenced and the effectiveness of the war and seat dumping was comming to an end, load factors at Sun were impressive in the last month.
AND SAA could themselves not continue with the price war. They had to put up fares otherwise their year end figures, even after doctoring to make Coleman good, were going to be abysmal. This would not hail well with the public, elements of Government, or the SAA privatisation process.
There are those who thought that this carefully devised plan of Andrew's was really clever. Actually, it was, when it was first used years ago. But he really just got lucky with his timing, and things didn't all go according to plan. There was a lot he didn't figure on, and the fact that all the domino's fell his way was less by foresight and planning than by design.