George – only if you want to pay me :D

A “top of the head” assessment is that things are getting critical for the 732’s now – especially if they haven’t had their lap joints done and if the FAA do issue the Boeing Blanket AD (aka the MD one).

Fuel Burn is one of the factors – but you also need to factor in Maintenance costs – a 319 gets it’s first real major at 12Y (there is a lesser at 6Y) whereas it’s generally taken that the 8Y is sort of a biggy on the 738 (although this can be argued with) – Structural cutting in at about 24000hrs on the 319 – so as far as these are concerned you can expect quite cheap maintenance for the first 10Y / 24000hr.
Conversely a 733 just out of D will cost more than one close to it so the airlines “liability” depends on where in the maintenance cycle the plane is.

You also need to factor in how the airlines is doing it’s maintenance – they could be doing “block checks” which require a quite large amount of downtime for the check (I know of one MD that was down for a year for it’s D & Blanket Mod – not here though) or they could be “phasing them” which spreads the downtime over the “between check interval” – ie once a C cycle is finished you immediately start doing parts of the next C.
It seems “phasing” is good on a new’ish plane but you lose the advantages the older it gets.

So if you have a 732 coming upto it’s D with lap joints and a blanket mod – it’ll be cheaper to scrap it and get a 733, your future maintenance costs will go down and you’ll get better fuel efficiency – if you’ve got a 732 with say 6Y to go and you can get good pax loads you may as well fly the a**e off it – but if your pax loads are low ………….

All in all it’s better to get the newest you can afford – but in the long term it’s better to own your own planes than Lease.
It’s also better to have a “compatible fleet” – in the case of SAA and their 319’s/738’s they could almost halve their spares stores and training costs if they could make up their minds.

Another item to think about is what you want – are you in it for the quick buck or long haul – unlike some LCC’s it appears that SA’s are in it for the long haul – SAA though do seem more interested in the “quick buck” which could be a function of it not being run by airline people but CEO’s etc on fixed contracts to make as much as they can in a set time
Another way of putting this is a “long haul outfit” will be happy making a sustainable lower profit than the quick buck outfit.

Crause – sort of agreed – but it would be sad day in SA if SAA was lost – just as it would be in the UK or Oz if BA or Qantas went (I wouldn’t miss AF though – another story).
I’d be happy supporting Government involvement in keeping SAA as International Flag Carrier or it becoming private with Govt support for “bad cost but politically good routes” – but they can leave the Regional and most of the internal to those LCC’s we have.

BTW – you may call me whatever you like – I might even give an award if you can better some of the things I’ve been called :ok:

ATR................

I think we are talking the same language, totally agree with you about management but hey what can we do? the pilots union is fighting tooth and nail against these guys, the scary thing is there arrogance, they have no experience of running an airline, but they act with impunity, cut routes with aircraft full to capacity and such.

I was trying to find some Statistics on the CFM series versus the older technology engines, have seen the stats posted at work but no luck on the net, instead I did find an interesting document at http://www.boeing.com/news/techissues/pdf/statsum.pdf

The first/second generation aircraft accident rate curve is rising, now I suppose that could be third world operators or it could be that these aircraft are just old and failing more often. My point is that thank god (or the SA tax payer) that the new technology is here in SA flying the public around. You can argue that if SAA was out the picture the other operators would prosper get new equipment run more efficient operations but just look at there track records when it comes to how they treat there crew, what makes anyone think that would change if SAA was out the way.

New Technology is great but its also good to have crew that are not fatigued, undertrained, underpaid.........just building hours so they can get into Emirates or Cathay.

George Tower..............got to agree, wish we had more pretty hosties, whats wrong with that? I bet thats why many passengers prefer to fly Nationwide, 1Time etc, if you ask me its good business sense

The first / second generation accident rate is rising = true – but look at where they are falling out the sky.

A key point in many incidents is Maintenance rather than crews – think about what you do when something fails – in general you “get around it” you don’t fix it and the failure could have been caused by an overworked underpaid hanger guy forgetting to do something (although there’s also an overworked underpaid inspector in the loop).

Take a walk to the engine shop (what’s left of it) – there’s some there that can talk your ears off about JT’s and CFM 56-5 & 7’s – not sure they’re that up on -3’s but SAA don’t have many 733/4/5’s

Will the LCC’s change if no SAA competition = doubt it – will they get “worse” if SAA start undercutting them = probably in order to try and survive.
Will a SAA LCC allow a level playing field = no way.

Are the LCC crews underpaid and overworked ? or is that that SAA crews are overpaid and underworked ?
Have I ever meet an hour builder who has complained he’s flying too much = No
I will be fascinated by this survey – it’s findings and who the comparison is against.

I don’t think I’ve ever meet anyone who’s paid enough – but SAA’s crews I think will have difficulty justifying a rise especially when you consider the money will come in effect from the Government so some could argue the money could be spent on Nurses etc instead.
(OK we all know where it will actually go – but in theory it could get to Nurses etc)

What can you do ? – a step forward might be to stop the “we are pilots so better than others attitude” (not necessarily you – but some) – maybe a pilots / engineers (OK Reduced T, “technicians”) united front would help ?

FWIW – I used to work for freight outfit operating WW2 Daks (some had really seen service) and DC6’s (one had bullet holes repaired) as well as Electras and survey Cessnas etc – none of ours fell out the sky – everyone was part of a team – there was no “we are pilots / you are grease monkeys” and management listened because they were also pilots and grease monkeys – so it’s not so much a function of aircraft age more “corporate ideology” – pissed off pilots and engineers don’t make for safe flight – especially when they don’t understand each other.

It may be a factor, but Crew error is till the number 1 factor in aircraft accidents, by a long way.

SAA crews are definitely not underworked, in fact most of the Captains on the 737-800 fleet are running short of hours and wont be able to fly in December, I think we are flying harder than most at the moment, hence all the rumours about 60/50/40 pilots short, yes and that is despite repeated warnings to management about the shortage, they dont seem to care, one cost centre sees a saving by having fewer pilots and see a big bonus for themselves but they dont talk to the other departments who have to pay EFP (extra flight pay) or the rostering department who will have no crew soon....same old story rotten management, and that can be blamed on BEE, they dont care that the workers are not qualified, they just care about Black faces in charge.......sorry but thats the truth.

Its not just SAA pilots that have issues with pay, take a look at the Emirates, Mauritus, Cathay, Quantas, BA, Virgin and many other threads, everyone is complaining, and do you blame them, any natural disaster or disease is used as a reason for cost cutting, the airlines ask there crews for pay/productivity concessions through difficult times, but when times are good the inverse is never true, same thing with the rising fuel price in SA (the world) the cost of everything goes up with the price of oil but hardley ever comes down when the oil price comes down, how do you expect people not to grumble when being asked for more productivity, less pay and in the mean time the boss is coming to work in a helicopter???

In CRM we are taught about the "Im OK, you'r OK" and "Im Not OK therfore you are not OK" the problem with the pay differences in SA is that the guys getting the bad deal are not shouting "give us more", they are shouting "give them less" (this seems to be a South African phenomenon) and despite what you think the crew are not paid the fortunes you seem to think, SAA is at present lower than most of the comparable airlines, in fact last information I saw was Kenya airways flight crew gets more than SAA flight crew. Was reading an article in the lastest Time or some business magazine the other day, the gap between management pay and employee pay (worldwide......in most businesses) is getting bigger at a frightening rate, the rich are getting richer and the poor getting poorer..........and that is a fact, I used to be anti -union but if it was not for unions what is to stop this frightening trend, if Nationwide cant get a descent union and stand up for there rights then thats there problem, all they have to do is stand togtether?

One last point


;)
I am sorry you think that pilots have this “we are pilots so better than others attitude” and its not the first time I have heard this, some guys (some of my mates at the other airlines even) think SAA pilots have this attitude the so called "Sky Gods". I dont know where this comes from, most of the guys are normal nice people there are some dick heads like in every organisation but they are a tiny minority, its unfortunate that people only remember the bad guys and not the good guys........its the old Goat :mad: er theory............... A man is sitting at a bar, drinking, and he says to no one in particular, "A man can spend his life building bridges. Do they call him John the Bridge Builder? No. A man can spend his life raising crops. Do they call him John the Farmer? No. But you **** one goat . . ."

Hi Fluffy

Crew error is the #1 factor = yes (ish) – quite a number of the crew errors seem to have happened when they are dealing with a problem – fairly often that problem can be a maintenance error which the crew then fail to handle sufficiently.
Take a 73 crash in the UK – crew error in diagnosing / noticing which engine had the problem – reason for crew error = engine problem caused by maintenance problem (haven’t read the report for ages so don’t want to say error).

IMHO pilots often are the “blame takers” and it’s not fully justified always.

I would point out that pilots hours are Regulated specifically for them – whereas the hanger guys are the same as a shop assistants and come under the BCE Act.
During my time as a FME it wasn’t that unusual for the pilots to have to have a day off whereas I went and fixed another plane and then flew with it.

I do feel that crews for a long time got used to not hitting the max they can do – and now they are their complaining a bit too much.
I also feel their workload has reduced – take the 738 it does most of it for you and you now don’t have to even move the eyes much due to HUD’s – this is said by someone who started on Daks and 6’s and progressed through various types taking part in many flights – I must admit that SAA 738’s crews lost some of my respect when they insisted HUD’s were deactivated until the entire fleet had them as it might be confusing to them if one had one and another not – two things 1 – to tell if you flying a HUD equipped one feel the bump on the Captains head (bumped head as getting into seat = HUD) and 2 – how do they cope with an Inop HUD – insist all are deactivated ??

CRM is wonderful but seems to be practised more on the flightdeck than carried over to the entire working environment.

I did try and make it clear I don’t tar all pilots with the same brush – but have noticed that National airlines seem to have more than their fair share of Skygods.
You have the ability to affect this – next time you see a fellow pilot act “Skygod’ish” jump on him – story - on a visit to an airline I used to work on I saw one coming in with someone who when I was there was a PPL in our cadet programme in the left hand seat – obviously I took the p**s – the FO actually said “you can’t talk to the Captain like that” whereupon the ex PPL now captain explained I could utilising words such as “pompous t**t” – I belive the FO underwent what could be called an “attitude readjustment”.

I’m glad to see your using Kenya as a comparison as I belive this is more correct than using BA / AF etc – I would like to see people like Brazil / Chile included as well (but not Varig as their situation would currently “skew” the result).

It is said sometimes that pilots earn their money maybe once in a lifetime – I have seen both from the flightdeck and the ground pilots really earn their money – but as planes get more reliable and as pax ops generally avoid real “money earning situations” it’ll become more and more difficult for pilots to justify large salaries.

I wish you luck in your endeavours – but would ask – would you prefer a 5% “supported rise” or a 10% rise that alienates many people.
I hope you’ll go back to work and start explaining to your colleagues they have to work on gaining “popular” support – currently I belive there is a lack of this – this belief supported by neighbours of mine where the underlying opinion on SAA pilots wanting a rise appears to be “greedy bastards”.

One point about the pilot / engineer relationship – last time I was there I watched as a team leader who had just worked many hours more than he should to get a plane ready try to explain to the pilot taking it what his team had done – I was not overly impressed by the pilots seemingly lack of interest – but was later impressed by his flying abilities.

Ask yourself how you treat the hanger guys (or even the Line guys) and when you last went to the hanger to see what they do.
We used to play a post D check game – during the subsequent test we’d show the pilot pictures of the plane during the check - those who could make sensible comments (ie – yes – how exactly did you sort out the problem with the repair down the back) gained far more respect than those who went “what the **** – hope you didn’t have bits left over”.

SAA is in quite a mess – starting a LCC won’t fix this – neither will pilots alienating other departments with pay demands.
Oh – and I know in theory Maintenance and Ops are different Companies.

Ouch guys....
 

Can I recommend a good publisher?

SAA thinks thats having a good airline (FSC) evolves around whether they have enough money....

Alliances worlwide are moving towards CRM where the pax can check in via Cellphone as he's driving up to the brand new E...Ekhuru....yes....stick to business in SA!

Every other ****** is trying to retire from the next tourist, we are as it is a long-haul dest. competing badly to what is on offer.

Hello

Mystic – that would be nice.

I’ve had thoughts about doing “the politics of aviation” and “how to treat your mech like a human” – but for some reason every publisher I’ve approached has said bad words when I suggested one of those up front payments like they give to people writing “my life as a CEO / Conman” type books.

You seem to feel alot, " I feel the workload has reduced" " I feel you are paid too much"................I have a few thousand hours on the 737-200, and about 1000 on the 800 right now, and let me tell you there is not much difference when it comes to flying, your time is taken up with different things, the 800 is however far safer becauses you have a bigger picture of your situation but its more information. I was under the impression that a technical man like yourself ATR was different to the lay person that thinks pilots just sit there drinking coffee and get to press the big red LAND button when the time comes. I dont make wild comments about other peoples jobs that I dont understand fully, would appreciate if you did the same

I have not learned anything from your post regarding Engineer/pilot relations, not because what you said was no good but thats how I treat these people anyway, maybe you should take a page from your own book and not treat pilots with such contempt......you seem to have a few issues regarding how pilots treat the ground crew

Having been on flight decks of DC3 DC6 Electra 732’s 733/4/5’s 738’s and scare buses as “operating crew” and “owners representative” I don’t think you’ll ever persuade me that the workload is not decreasing.
It may be true you have more hours on type – but how many full production test flights have you done ? – I count well into double figures – how many ferry’s ? – for me too many to count.

It’s strange you can accuse me of treating pilots with contempt – only the other day I was accused of being a “pilot lover”.

I’m glad you treat the ground guys well – not all pilots do.

I “feel” a lot because these are opinions held by myself and I belive others (some aviation related some not) – if you wish to disregard these opinions feel free – but I’m not sure it says much for your CRM and it sure doesn’t bode well in any effort SAA pilots are going to make in gaining support for a possible pay rise – unless you don’t care about the division within the airline this will cause.

If you can’t persuade me a “technical man” with an understanding of what you do (no matter how limited you’ve decided this understanding is) that you are overworked and deserve more money / less time – how on earth do you think your going to persuade the lay person ?

I have spent LOTS of time in the atrium buying coffee and drinking it in that little area outside where you could smoke – admittedly not since 1st Q this year – and heard lots of moaning but seen few truly underpaid / overworked crews.
But the coffee sure has improved since the days SAA had A320’s.

Edited to say
Oh – I should say I’ve seen underpaid overworked crew – just not SAA ones

Reading threads like this and others about SAA it seems there is a common feeling that if SAA would just dissapear then the other carriers would just make such a great sucess of themselves we would be just such a happy country.

A question, who would fill the void? Domestically maybe things would be ok but do you think Comair/Nationwide/1Time will be able stand up to the likes of Virgin/BA/Lufhansa/Emirates etc etc-on the international stage? forget it! they would be slaughtered. I know this will offend all sorts of sensibilities but they just dont have the know how to pull it off. Im not referring to the operation itself- its all the little things that that bite you. By the time these guys have paid all their school fees they would be long out of business.

SAA's role is a strategic one- its mere presence keeps other carriers serving a route remain competitive and thereby the prices passengers pay should reflect that. Would that Virgin ticket to London be that cheap if they dint compete with SAA?

So the point to all this- dont wish SAA away- wish that it could be privatised and in so doing enable itself to shake off the eneficiencies that come from being a state owned enterprize. BA was in exactly the same position and the look how it has performed since it was privatised.

AND...now for something completely different........yaaaaaaannnnn....eich...gotta sleep!

The new CEO has already turned SAA ito a low cost airline.... all he's got to do now is bring the ticket prices down:hmm:

SAA is already a low cost airline in terms of regional ticket prices....go check the websites, do a bit of comparitive shopping.

Flying public...
 

Everybody seems to believe that SAX will become the SAA LCC, but not to sure if they know that SAX is buying more turbo props! Well trying to anyway.

The CEO is hell bent that that is the future. ( do they come in steam driven as an option?)

The leasing in of the DC9's and 732's is only temporary until the NEW Turbo props arrive! That will go down well with the public!

You guys are worried about the public choosing between new and old jets...well how about Old jet vs new prop job.(70 seaters nog al)

The flying public are actually quite nieve when it comes to these things, especially the people wanting to travel LCC, so they dont actually care as long as it is a jet.
:ugh:

And they want to use them on routes that fly near capasity with the very same DC9's and 732's. Very clever marketing that! Putting on a smaller slower aerie,the public luv that! I wonder if Rynair and easy jet and co know that?....must be why they are struggeling so much. We should send them these managers to teach them how to do business! *eish*

So i think grab what ever time on type you can and get out of here, cause these "previously disadvantaged now overly advantaged and not quite sure what to do" folk will manage us all into the ground! No matter who you fly for!
:uhoh:

Good grief i need a drink!...

SAA eyeing low cost airline market
 

From the horse's mouth !

Quote:

---

ohannesburg - SAA, Africa's biggest airline, was considering establishing a low-cost division to compete with new entrants that have taken a quarter of the country's domestic market, chief executive Khaya Ngqula said yesterday.

"We would like to take on board our board, shareholder and workers'' before proceeding with setting up the low-fare brand, Ngqula said. "It's a dynamic industry. We know we have to do something.''

Local carriers including Comair's kulula.com have taken market share from Johannesburg-based SAA in recent years. British Airways, Europe's third-largest airline, owns about 18 percent of Comair, South Africa's only listed airline.

SAA and two unions reached a wage agreement on July 28, ending a six-day strike that grounded 75 percent of the carrier's flights. It agreed to increase wages by 6 percent, 1 percent more than its previous offer.

Under the settlement, the carrier would spend an additional R105 million over three years improving "deplorable'' working conditions, Ngqula said. The agreement would ensure that "this airline is going to be stable and viable".

The carrier will raise meal allowances, increase rest periods for cabin crews on long haul flights and introduce more flexible working hours.

The airline also agreed to raise wages of technical employees by 5.4 percent, Ngqula said yesterday. The unit employed about 3 000 people out of the airline's 11 000 workers, said Viwe Mlenzana, the newly appointed general manager responsible for human resources.

Ngqula said the deal "reinforces the confidence we have in the ability of our people". He said the past months had been tough for the airline. But with it posting a profit this year, it had been decided that staff should benefit.

"We are going to have happier employees [and] the competitive edge about this business is service delivery," he said. "If we make profits, everybody benefits."

Ngqula also introduced executive members who have recently been appointed. They are Mlenzana, the general manager of human resources; Collin Jordan, now the general manager of flight operations and the former negotiator for the pilots unions; Molebatsi Mogai, the general manager of sales and marketing; Patrick Dlamini, the general manager of cargo; and Jan Blake, the acting chief executive of SAA Technical.

SAA communications general manager Onkgopotse JJ Tabane is leaving the company to join the Adcorp group as the chief executive of one of its communication subsidiaries, Graphicor.

---

Link

Using taxpayers' money to shaft the taxpayer in the long run again. Nothing new there...:( :rolleyes: :*

Low Cost Carrier....my @rse!

Just been on BA's website and priced a one way to LHR next week - cost R4800 +/-

Been on flysaa.com and its a whopping R15,000. Both of those Y class seats.

Anyone taking bets on who isn't getting my business.

GRJ TWR I have just been on SAA's website, and I found the following:-

Web Only, Non-Voyager, Upgradeable, JNB-LHR ZAR4530.00



:confused:

Oh tall one

Think the LCC idea is for internal and regional only.

Now if they wanted to carry the model onto the Long Haul it might get a bit more support.

BTW – Virgin reckon they can take you next Tuesday for R4528
Know who I’d chose.

Gulf Air, based in Bahrain, has an all economy subsidiary called Gulf Traveller, operating a fully fledged economy only service. They operate 5x 767/300's, mainly to the Sub-continent. (Pilot's are paid the same). It works well, and generates a lot of revenue for the airline. Thousands of pax cannot afford to fly, and many are quite happy, with a cheaper way to fly. With so many youngsters, and older people who don't need or want high prices, when they travel, Gulf Air, and to a lesser extent, Air Arabia, out of Sharjah, have shown it can and does work. Put these people in aeroplanes and keep them out of buses and trains. SAA, could well do the same. More pilot jobs, definately. As pilots, don't we want that?
Together, with the "sky-nannies", looking after young kids on the Western and Australian routes, and the "sky-chefs" as well, the airline has catered for both ends of the market, and is profiting from that. Easy Jet, Ryan Air etc have done it. Gulf Air as an airline are doing it. Take note SAA, it works.
tic

IMHO SAA getting involved in a low cost airline is offsides. Every time they make a loss the tax payer picks up the tab. And please dont tell me they made a profit last year ...In the real world they would still be paying off their huge forex loss.

Why would you edit out other peoples posts?

SAA to start low-cost airline
 

11 April 2006:
Business Day

This is a standard response from an 'old' carrier. They have all tried it - right across the world. If they DO get the venture off the ground, it's chances of success are few. The reasons for that are self evident but let's start with the fact that they are starting from the wrong end of the idea.

But, to an outsider, SAA have made the first big mistake in thinking that there is a segment of the market that they can take/retake! There are, probably, already TOO MANY carriers in ZA (old or new) and the next move will be consolidation, not expansion. So, I suggest that this idea will not get off the ground but will absorb lots of lovely time, resources and money before it is laid to rest under mutual congratulations of a project well researched. :rolleyes:

Since when do taxpayers in SA get a choice in what happens in SA anymore?
Fair went out of the window a long time ago. The present government is not beholden to its taxpayer base. It does not care what you think as a taxpayer because you don't vote for them anyway.
Nope.... all SAA has to do is offer 15 Captains each from kalula and 1Time a job, whilst simultaneously undercutting their fares and these low-cost carriers will kark it.
QED

I have a funny feeling we are going to see Afriaviation's gripes and moans manifest in reality. Wonder if that is how SAA is planning to accelerate their previously "dis"advantaged group.........

Somehow I dont think so- this project has some seriously experienced people working on it, think old Afri is going to be a tad dissapointed in the way flight deck recruitment will be handled:suspect:

More taxpayers money for SAA to waste
 

So now we are going to start a low fares airline. What a joke- they are already competing against the "real" low fares companies -just go to the SAA website.
I cannot believe that this can be allowed given the track record of this money losing institution.
Just remember the money hedging billionsthat were lost, Colemen's handout, losses on the Tanzanian experiment, Sun Air..................................the list is endless.

The fickle public are also to blame as they have short memories as to what they used to pay before Kulula and 1time came onto the scene.

Not to mention the ridiculous salaries that we, the taxpayers, subsidize to a largely under utilized and poorly run airline.
Let me go and work..........at least I don't have a conscience about where my salary comes from.....................

So ZERO3L, you have some strong views, what would happen if you were offered a position in the National Carrier flying nice shiney new airbuses, would you turn it down because your conscience wouldnt be able to handle it?

This is not about a new low cost carrier getting back market share that SAA has lost. Check out the Australian section and see what is going on between Jetstar and Qantas. Its about management getting a lower cost base and using it as leverage to reduce conditions of mainline.


SAA Pilots

BEWARE

As much as Im sure top management at SAA would like to blame the pilots for their current predicament, the facts are that the airlines business model is the problem- you cant sell seats for R1000 return to CPT if your costs ensure you wont breakeven- even on a 100% load factor. What needs to be done is align the offering with what is charged- thats the objective. SAA's top corporates are currently paying 50% less for the same service and getting all the benefits.

SAA pilots are protected by numerous collective agreements that are as close to bullet proof as an agreement can get- the mere mention of a pilot strike last year immediately caused a 40% drop in forward bookings for the period the strike was supposed to happen over- an experience management will not want to repeat soon.

Its important to remember that the biggest cost SAA faces is poor utilization of the fleet- the new business model will address this- irrespective of whatever schedule the "new" carrier undertakes SAA will maintain, at least, its current schedule commitments. This will mean that more pilots will be needed- either at SAA or at the new company depending on what is finally negotiated with the pilots.

I think the crux of the debate focuses on the morality as to whether a state run enterprise should be allowed to what is being proposed.

I recall that British Airways faced a very lengthy legal battle when it launched its own LCC in the late 90's GO which ironically was sold off to easyJet, as Rod Edington didn't think an LCC suited BA's business model.

I personally believe that SAA and SAX should be privatised immediately, and any form of state subsidy should end, and then they should be free to set up whatever brand they wish. I believe that way would be the best future for SAA but the problem would be that politically the cost would be unacceptable because short-term pain of job losses and restructuring would not be traded for long term gain.

I'd also be inclined to rebuild the SAA brand.....just what on earth are we to think of an airline who's main tv advert shows two blokes groping for a glass of water

On the face of it SAA has the perfect kit for an LCC - nice new a/c either 738 or the 319 which I bet offer far lower seak km costs than an old DC-9 for instance. With oil prices of 70$ per barrel the DC9s are surely going to start drinking away the profits.

Any how I wouldn't be surprised to see SAA taken to court over this, given previous rulings about anti-competitive behaviour.

Just a slight correction and is is only for accuracy and not criticism of George Tower.

BA started 'GO' and it did very well, competing with easyJet and RyanAir. After some changes at Mainline, they decided to sell it off. GO was bought by an investment company led by '3i'. The airline prospered to the point that '3i' decided to realise their investment in a purely financial manner. That is to say that they were financial people and were not interested in the airline business as such. 3i sold to easyJet which irritated a few people.

So we had some old fashioned market consolidation in the uK, which is why I said earlier in the thread, that I expect something similar will happen in ZA in due course. If SAA think that they can find a way to a cheaper cost base by using an LCC, then the experience of carriers across the globe is that it is an extremely difficult trick to pull off. Most do not succeed.

The best way to reduce your cost base is the Swiss and Sabena method.

What we must remember here is that SAA is an instrument of the state- they pull the strings and therefore pay the bill when the people they appointed cant shape up. In terms of privatising SAA who would honestly want to buy it? Not because there isn’t potential to make money, because there really is, but simply because the aviation sector is too volatile. The only companies who value stakes in other carriers are other airlines- that’s been tried before (Swiss) and found to be totally unworkable.

The Sabena option is also very risky for the economy of South Africa- SAA is vital to the transport infrastructure of the country- look what happened during the strike last year- imagine that going on for weeks on end. SAA transports over 50% of the passengers who fly domestically. The other carriers simply do not have the capacity fill that void initially (everyone's load factors- including SAA's are quite good at the moment)- they could in time move into the space but it would take time for them to meet the demand- expansion is capital intensive and some of the domestic operators pockets are just not that deep. Some have problems raising capital and have to borrow at near loan shark rates- rapid expansion in this environment would probably cause more pain than good. The only clear winner of this type of situation would be Comair, who have the cash and the know how to make it work- only they tend to be very conservative and I don’t see them adding 20 new aircraft to their fleet in one shot- which is really the only way you are going to fill the void. CE will not be able to cope with this type of dramatic market swing- the way the company is run will preclude this.

So its a case of careful what you wish for- the reality may not be what you anticipated. Prices are at an all time low- things could not be better for the travelling public- if any one of the players depart the market, prices will go up. History shows this has happened every time an airline has gone bust in this country.

Correction. The taxpayer foots the bill.

Yes, I would have thought that was entirely obvious- where else does the state gets its money from?

Correct.

Unfortunately, the general perception among the populace of SA is that the state has lots of money. The fact that it has to come from somewhere is not apparent.

Another taxpayer funded cock up is not going to make things better for the already beleaguered bloke who has to bail them out every time.

My objection is to their opposition having to budget carefully and make a profit while SAA has free rein to squander the money their opposition have to pay as tax.

No one disputes the "unfairness" of the state subsidising a company in competition with other smaller private companies. Clearly the state feels its justified in doing so. Here is some food for thought:

Companies like SAA, Telkom, the SABC all state owned and with the exception of Telkom (until recently) have had their industries deregulated to allow private sector competition. These private companies now use the infrastructure that was paid for by the state- to support the state owned enterprise, to support their current operations.

A good example of this is how SAA sold (for literally a song) Comair its first 3 B737's ZS-SBN/SBR/SBO SAA even provided the pilots for the first year- the deal included full maintenance (which still continues for some of their fleet today) for the fleet- without this help things would have been much more expensive for Comair to get into the market in the first place- Comair benefited form the infrastructure paid for by the tax payer. Comair used this SAA connection to gain credibility among the travelling public when all it had were a few F27's and an old DC3. The deal also included use of SAA's sims- which Nationwide also still use to this day, why, because it’s cheaper than going elsewhere as well as being convenient.

These are just small examples of how private industry has benefited from state investment. Even 1Time benefit form taxpayers money- they are handled by Equity aviation- 50% owned by the state, why do they offer such cheap handling prices to 1Time? Because SAA (by definition the taxpayer) has over the years paid for all of the ground handling equipment they use today (Equity- Previously called Apron Services was part of SAA for decades until it was unbundled form the Airline in the 90’s) Equity even check-in 1Time in some outstations – again offering cheap prices because the staff and ground handling equipment are at that station to service SAA in any even event. This allows 1Time to open up shop in a city for no infrastructural costs at all- effectively at the taxpayers’ expense. Kulula also make use of Equity at some stations that CHS do not operate from.

This issue is not as cut and dried as you may think

Good one Bart