Gunship
21st Aug 2005, 06:58
National carrier South African Airways (SAA) will remain in state hands, but government "may bring in another partner", Public Enterprises Minister Alec Erwin said on Thursday.
Speaking at the University of the Witwatersrand's Business School, Erwin said the global airline industry was volatile and it would be "completely unrealistic" to expect a British Airways, Lufthansa or Emirates to show the same strategic objectives for SAA as the government would.
"It is far better for government to be the main shareholder than to beg the board of another airline," he added.
Erwin said that the airline industry is critical for Africa and he said that in the next year some "extremely interesting announcements" could be expected from SAA.
He added SAA would partner with airlines across Africa to strengthen the African airline industry.
Erwin said that high fuel costs were a worry. Referring to the hedging debacle of previous years when the airline reported large losses, Erwin said that the airline had "overcome the currency problem", which he described as a mindset problem, where people had bet against their own currency and lost.
He said the airline learnt a lot from that and he was confident that SAA's new management and board is better.
"We need improved efficiencies from SAA but we will get there," he added.
Erwin added that the process of moving SAA off Transnet's balance sheet was a complex exercise, but good progress was being made.
After reporting losses of R15-billion in two years -- R5,977-billion in 2003 and R8,61-billion in 2004 -- SAA reported a net profit of R966-million for the 2005 financial year. The turnaround was achieved amid difficult conditions of rising energy costs, thanks to an unstable oil market.
Speaking at the University of the Witwatersrand's Business School, Erwin said the global airline industry was volatile and it would be "completely unrealistic" to expect a British Airways, Lufthansa or Emirates to show the same strategic objectives for SAA as the government would.
"It is far better for government to be the main shareholder than to beg the board of another airline," he added.
Erwin said that the airline industry is critical for Africa and he said that in the next year some "extremely interesting announcements" could be expected from SAA.
He added SAA would partner with airlines across Africa to strengthen the African airline industry.
Erwin said that high fuel costs were a worry. Referring to the hedging debacle of previous years when the airline reported large losses, Erwin said that the airline had "overcome the currency problem", which he described as a mindset problem, where people had bet against their own currency and lost.
He said the airline learnt a lot from that and he was confident that SAA's new management and board is better.
"We need improved efficiencies from SAA but we will get there," he added.
Erwin added that the process of moving SAA off Transnet's balance sheet was a complex exercise, but good progress was being made.
After reporting losses of R15-billion in two years -- R5,977-billion in 2003 and R8,61-billion in 2004 -- SAA reported a net profit of R966-million for the 2005 financial year. The turnaround was achieved amid difficult conditions of rising energy costs, thanks to an unstable oil market.