SAX moving to DPE

[nugpot]

Following from Business Day:
http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A442552

CAPE TOWN — The state is to take over South African Express Airways from Transnet, a cabinet spokesman said yesterday, ending speculation that the niche airline might be sold off to a private sector operator.

It increased its revenue 31% for the year to end-March last year and posted a net profit of R177m, but analysts have noted its “precarious” financial position.

Its liabilities exceeded its assets by about R300m at the end of its financial year last year, raising doubts about its ability to continue as a going concern.

Considering that SAX was started without any capital at all, the "precarious financial position" is just a factor of financing everything from day one. At the current yearly profit, SAX should be trading in the black in 2 years time. With SAA eating billions, maybe DPE should pump some capital into SAX and at least have one profitable airline....

Oh, and SAX's pilots earn market related salaries......;)

[Frogman1484]

Sax'x problems are the same SAA has...they are both run by a bunch of affirmative action guys that have no idea about running an airline never mind a business.

They would loose money if they were selling water in the desert!!!

[Avi8tor]

After 10 yrs of trading and it still cant stand on its own 2 feet?

Found another bit out of the Business Day

LOOKS very much like Transnet is dressing up South African Express as the Cinderella of its stable — rather than its ugly older sister of SAA — as it sets about finding a groom for the teenage airline.
SA Express is a less obnoxious beast than the money gobbling SAA, and it flies 85000 people a month to niche destinations ....

Among messy accounts for recent years that seem to contradict each other, there is a R302m baleout from Transnet (indirectly, the state).
Of course, it won’t be easy getting details; SA Express’ full set of financial reports aren’t available on their website or at the Registrar of Companies.
Luckily, we stumbled on SA Express’ financials for the past three years. They lay bare some distressing features. For a start, for all its impressive profits, SA Express’ cash flow tells a different story.

While it generated R263m in cash in 2006, less vigilant money management and a loss on derivatives meant it ultimately burnt R79m in its operations.
Also, there is the matter of a R332m “overdraft”, which SA Express shifted around its books. The 2005 accounts say that on March 31 that year, SA Express had a cash deficit of R302m due to a R332m bank overdraft.
But in its 2006 financials, this overdraft disappears from its cash flow statement, which says SA Express started the year in April 2005 with positive cash of R7,9m. How can the opening and closing balances differ to the extent that there is a R310m difference between 31 March and April 1?
Well, it turns out that this “bank overdraft” is sloppily just “shifted” into long-term debt without a word of explanation.

In an interview, SA Express chief financial officer Sikhum- buzo Zulu says the “bank overdraft” came from Transnet, and is being paid back monthly at an interest rate of prime minus 5%.

As with SAA, taxpayers have funded SA Express by the million.

Read the rest http://www.businessday.co.za/Articles/TarkArticle.aspx?ID=2584324

Can I borrow R310 bar at prime MINUS 5% please?

[Q4NVS]

Sax'x problems are the same SAA has...they are both run by a bunch of affirmative action guys that have no idea about running an airline never mind a business.

FGM - you have no idea what you are talking about boet...

In the first place, SAX is not run by a guy, but a LADY! (Who has managed to grow the company by close to 40% over the last 15 months.)

Secondly, as mentioned on a previous thread, that is a profit margin larger than BA/Comair.

Lastly, did anyone know that Mr.'s Venter and Novick (Jnr) each grossed R 3.2+ Million in the 2006 Financial Year. That does not include Mr. Novick (Snr).

Wrt the R300 million...

Aaggh Please!

As if RF bought his ERJ's Cash! :=

:O

[Avi8tor]

Can I suggest that SA Express stop 'growing'? It will cost the tax payer less.

It won't be long before DPE gets sick of pumping money into SAX too. Then there will be tears like at the 'older, ugly sister'.

I would gladly pay anybody R3 mill if they ran SAX without my money. Comair is a listed company, good for Novick and co.

[Q4NVS]

Can I borrow R310 bar at prime MINUS 5% please?

Maybe, with your "new" Link Salary you might just Qualify.

Try Investec...

:} :E :}

[Avi8tor]

RF didn't buy the ERJ's with my money. Yet again, its a totally private company. The tax payer isn't lending him money at prime MINUS 5%.

This is not to bash anybody, I wish all airlines were REALLY doing well. Not needing 'creative accounting' and tax payers money.

For the LONG TERM health of the industry, the government needs to get out of aviation.

[nugpot]

RF didn't buy the ERJ's with my money.

I would take a second look if I were you. Find out where the finance came from. Something about SAA's 10% share in Airlink might crop up.........

[nugpot]

it certainly was not their 10% that payed for the ERJ's.

If you research the articles on the order for the ERJ's, you will see which government official was on hand to sign the guarantees. The same person that was present when SAX leased the Q400's.

[Q4NVS]

Thats strange, seen as various banks and other investors claim to be the owners.
Airlink are in the black...
:confused:

Strange this, as according to most on this site any Airline that owes anyone a cent is a disaster and should be shut down :zzz:

So when you buy your R2 million house on the fairway and promise to pay it over a period of 20 or 30 years, does that make you a Financial Disaster?

No, except when you default on your payments.

But according to "Pprune Aviation Economics" you should leave your job, hand back your keys and sit on the pavement accepting financial ruin and defeat.

Maybe its just me, but hey I have seldom made a cent without taking some sort of risk.

Now ask the Flight Attendant to pass you Richard Branson's book: Losing my Virginity or the one by Siobhan Creaton called Ryanair.

Turn to page(s) 1 and read...

:E

[Avi8tor]

So when you buy your R2 million house on the fairway and promise to pay it over a period of 20 or 30 years, does that make you a Financial Disaster?

No, except when you default on your payments.

But according to "Pprune Aviation Economics" you should leave your job, hand back your keys and sit on the pavement accepting financial ruin and defeat.


I dont think anybody is saying that. I think what the general thread has been that ALL airlines should play on a level playing field.

If you want (and can pay for) a 2 bar house on the fairway in Drainfern, crack right on. But dont keep asking the tax payer for help every yr.

Its just kinda funny that Comair, Link, Nationwide and 1Time seem to be able to do it without government money. Its about time we see if SAX and SAA can.

[JetNut]

Funny how the only one's complaining about SAX or SAA are those who can't get in...(and will probably never).

[Shrike200]

Funny how the only one's complaining about SAX or SAA are those who can't get in...(and will probably never).

You're going to have to come up with a new line....apart from being just plain feeble on so many levels, it's getting old as well.

[Avi8tor]

I really thought u had to be older than 12yo to get PPL let alone a CPL?

If thats the best argument you have for state controlled loss makers, I can see why they are in financial trouble.

[Deskjocky]

Link and government money......how much money do they save by the taxpayer funding most of their ground handling? This is all coming out in the wash at the moment. Lets have a look at some facts, when SAA gave GRJ to SAX part of the deal was that the staff were moved to SAX. The same has not applied to Bulawayo- where Link effectively refuse to take the staff over and are therefore being handled there for free, SAA is unwilling to simply dump these poor folk as we all know the situation in Zim- Link know that too and are taking advantage. The dodger strikes again! This situation will not last forever however……..

SAX moving to the DPE is brilliant news- and will only bode well for SAX -such as the recent Livingstone example. What’s interesting to note here is that link were also given the option of participating.

[George Tower]

What’s interesting to note here is that link were also given the option of participating.

DJ could you just clarify - do you mean that Link had the opportunity of taking on SAA routes they were "discarding" for want of a better word, and didn't take it?

[Deskjocky]

Lets just say they didn’t like the terms of the deal we put forward- SAX did and now make a guaranteed return every time they operate- the route still belongs to SAA. The problem we faced was that we had a fixed number of seats, per week, on the bilateral with both CE and BA having more designated capacity than us. We wanted to go daily as we have very strong demand from an inbound perspective- but naturally the other carriers objected. Plan B then swung in where we wanted a change of gauge but since our smallest aircraft is a 319 we needed something with 50 seats or less- enter SAX and Link. I’ve already mentioned Link’s response so SAX now wet leases us a CRJ/Dash8 every day to the falls. They get utilization, we get our daily frequency and in so doing keep over 1000 international inbound tourists every month off the likes of BA and AF and on our metal. Nice deal all round.:ok:

[unmanned]

Looks like link was not stupid enough to accept those conditions!

By the way really tough to start a company when your capital/aircraft are given to you as a BEE initiative from foreign countries to get you going! What a load of hog wash wrt 'we started it all on our own' without any external funding, ha ha ha.

[nugpot]

capital/aircraft are given to you as a BEE initiative from foreign countries to get you going! What a load of hog wash wrt 'we started it all on our own' without any external funding

Strange way of giving if you have to pay for them.

You should think before you post. Your ignorance is showing.

[Avi8tor]

Airlink was gonna be SAX, RF had a meeting with SAA in '92ish. They had been watching the trends around the world with hub feed. American had American Eagle etc. They wanted the same. Hence RF got the ATR's in '93.

But Bombardier had 12 Dash lates without a home after the strike that lasted 13 months. They went to the canadian government. Somebody got wind of the 'express' idea of SAA and had a brainwave.

Shaft RF, start a BEE company that became SAX. Nobody put up any money, just over financed the aircraft for start up capital. When it all went pearshaped, the canadians sold there shares to Thebe. Thebe couldn't take the loss. EEESH a probem.

So I entered the picture, and used my taxes to pay Thebe. So the government had another loss making airline.

[Frogman1484]

Avi8tor, you are 100% correct.

The guy that set up SAX was a Canadian con artist who traveled around the world setting up airlines for minority groups and pocket the commission of the A/C. Generally he would stick around for 2-3 years and then run before the house of cards would fall down. If my memory serves me correctly he did pull out and left in 1-2 days.

I think you can safely say that if it was not for SAA and the tax man's money SAx would not be around today

[Q4NVS]

And the point of this all is...what?

SAX has a rumoured debt of R300 Million - which Airline does not?
(Except if you just sold almost half your company to Investec)

SAX makes a healthy Nett Profit - in the region of R177 Million I am led to believe.
(Which other Airline does - very few yes)

The telling truth in this whole thread, is the fact that even if SAA has a miracle turn-around and makes R3 Billion Nett Profit per year, they will still be bashed. So why waste your breath...:oh:

Why (if they make a profit) I do not really understand - Oh wait, it has got to be the fact that there is a Private Company (or two), who could buy a few more 20 year old jets and try to provide the same service to the Taxpayers.

Similar to what is happening to SAX now, is it not.

Just interesting that those same Taxpayers (with ERJ Command et al) are continuously forwarding CV's to SAX. :zzz:

Now get used to it - as SAX is only in the infancy stage.

At the same time, if you are really serious, update those CV's and submit.;)

More/"bigger" surprises on the way...

:ok:

[nugpot]

Q4, don't waste your breath. Froggie has shown in other threads that his grasp of the SA aviation scene is tenuous at best.

[Avi8tor]

I also wish SAX well, and the boys and girls that fly there. But its time to level the playing field. Its time to stop costing the tax payer money.

Auditors APF Chartered Accountants say this “material uncertainty” casts “significant doubt on its ability to continue as a going concern”.


Thats out of the Business Day. If it was making a real profit why does SAX need government money again? How did it manage to burn all its cash if its making a profit?

Sorry people, paper profits don't count.

[Sir Osis of the river]

"Why (if they make a profit) I do not really understand - Oh wait, it has got to be the fact that there is a Private Company (or two), who could buy a few more 20 year old jets and try to provide the same service to the Taxpayers"

Q4NVS,
I really would like to see a poll about who thinks SAA's sevice is any good. Personally, and it is only my opinion, I think their service and attitude stinks.

I can only comment on domestic service, as fortunately I have other choices for international travel. Why sit crammed in an A340 with 300 odd other people, JNB to CPT, and get Mr, or worse Mrs AA employee of the month throw a very stale missile called food at me without so much as a smile and never to be seen again, :uhoh:

when I could sit in a nice leather seat on a CLEAN MD80, pick what I want from the trolley and gladly pay my 10 bucks, enjoy my nice fresh sandwich and the lovely smile I got being served??

No contest, me thinks:D

[Deskjocky]

really would like to see a poll about who thinks SAA's sevice is any good. Personally, and it is only my opinion, I think their service and attitude stinks.

I can only comment on domestic service, as fortunately I have other choices for international travel. Why sit crammed in an A340 with 300 odd other people, JNB to CPT, and get Mr, or worse Mrs AA employee of the month throw a very stale missile called food at me without so much as a smile and never to be seen again,

when I could sit in a nice leather seat on a CLEAN MD80, pick what I want from the trolley and gladly pay my 10 bucks, enjoy my nice fresh sandwich and the lovely smile I got being served??

No contest, me thinks


Just in case you forgot to look- the thread is about SAX not SAA. You sound like a used car sales man- CLEAN MD80= wheezing old banger with a shiney new paint job:E :ok:

[Frogman1484]

So Nugpot, let me guess...your having a go at me because your dream airline is also not making money, or is it another one you cannot get a job at?

[Sir Osis of the river]

Deskjockey,

In case you did not read the post properly, Q4NVS brought SAA into play. (If I misunderstood his post I apologise :uhoh: )

As far as I am aware, my shiny old banger does not compete with SAX, but only SAA.

I have never flown on SAX, so cannot comment on their service, but agree with most that it should not fall into government clutches, or else there goes the profit , if such a thing exists........