A recent article in the Canadian
newspaper, The
Globe and Mail, outlined the rise of Africa’s
biggest airline, Ethiopian Airlines, and the tragic decline of its biggest
rival, South African Airways (SAA). The article suggested
that the fate of the two state-owned airlines has mirrored the contrasting
paths of the two countries - South Africa, the most advanced economy in Africa,
has slid into corruption and economic stagnation in recent years, while
Ethiopia has become one of the fastest-growing economies on the continent.
It is worth noting that South Africa’s GDP is four times larger than that of Ethiopia: $350 billion compared to $81billion.
It is worth noting that South Africa’s GDP is four times larger than that of Ethiopia: $350 billion compared to $81billion.
SAA’s seven consecutive
years of losses has added to its unsustainable debt levels and it only survives
on government bail-outs worth S$4.3 billion since the end of the Apartheid era.
Its top-heavy management, overstaffing and political interference have brought
the airline to the brink. In contrast, Ethiopian has grown by about 25% per year
over the past eight years and showed a $233 million net profit last year. The
difference between the two airlines is perhaps best illustrated by comparing their
fleets and staffing levels - SAA has 58 aircraft and 180 employees per
aircraft, while Ethiopian has 108 aircraft and 125 employees per aircraft.
Over the past few years
SAA has reduced its network, gave up prime routes and landing spots such as the
invaluable direct Cape Town to London route. A large number of its pool of highly-trained
and experienced pilots are today flying for Ethiopian, Emirates, Qatar and
others, and it is not unusual (but quite comforting!), to hear the pilot speak
with a South African accent on any of these carriers.
SAA is not the only
state-owned or parastatal entity in South Africa that is in serious trouble (Eskom,
SABC, Prasa and Sanral come to mind). However, as the national flag carrier with a previously
proud history going back to 1934, its
demise will be a huge financial shock and a tragedy, but it appears to be
inevitable.
Read also my review of
Ethiopian Airlines’ business class:
