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South African Airways has raised the flag of a proud young democracy after the emergence of the country of the apartheid era.
But in 2015, he was heavily indebted and prepared a gesture that reflected his chronic mismanagement: opening a lightning path in Khartoum as a favor of President Jacob Zuma to his Sudanese counterpart.
An official scribbled a report to the Minister of Finance: "I do not understand why this entity can consider another path that creates losses!" The plan was eventually defeated by the Treasury and the note revealed this year by a Zuma corruption investigation. Yet, many other financially destructive ideas have been put into practice.
The fate of SAA, which has not made any profit in six years and required about 30 billion rubles of government bailout over the last five years, has become a serious test for the successor of Mr. Zuma, Cyril Ramaphosa.
The former businessman took office with the commitment to rebuild the state institutions, ruined by corruption and mismanagement of public finances. While other state-owned companies, including the Eskom power company, are yielding on heavier debts, the battle for SAA's survival highlights the grim choices Ramaphosa faces.
Even his own finance minister, Tito Mboweni, has hesitated to save SAA, which is seeking nearly 16 billion rubles from the state to support the airline as it plans a return to profit by 2021 and finally looking for an outside investor.
Pravin Gordhan, former South African finance minister and now supervisor of Ramaphosa's state-owned companies, said that while supporting the airline's survival, SAA needed to fight the legacy of corruption before private investments are not feasible.
"Do you want to buy a shirt full of holes even if it is for sale? We need to clear the ground so this airline can survive, "he told SAA staff this month.
Many people accuse the company of abusing its law for years under Dudu Myeni, president until last year, accused by opposition parties and a civil society group of running the airline as a fief under the protection of Mr. Zuma. According to them, Mrs. Myeni, who also runs the charitable foundation of Mr. Zuma, granted favors through aircraft leases and – as in the Khartoum case – routes borrowed. Ms. Myeni and Mr. Zuma denied any wrongdoing.
SAA has made efforts to improve performance by putting in place a recovery plan led by Vuyani Jarana, its new Managing Director. But in the past, it has fought some important, wrong steps, such as cutting long-haul routes to Cape Town. Rival airlines from Europe, the Gulf and other African states have all benefited from the expansion of links to the tourist hub.
The SAA must also control its finances, after having recorded a loss of 5.7 billion rand in its 2017-2018 fiscal year.
An officer in charge of overseeing the rollover said: "Everything surprised me when I started. Nothing surprises me anymore.
Doubts about SAA's viability were exacerbated last month when Finance Minister Mboweni suggested that the government could reduce its losses and shut down the carrier – comments that made creditors unhappy.
The move to SAA was "unlikely to solve the situation, I think we should close it," Mboweni told investors in New York.
Ramaphosa blamed the statement that SAA's debts would be immediately due if the state abandoned the airline. This could wreak havoc in the public purse if it made lenders doubt the solvency of other crown corporations, he told MPs after the finance minister's statements.
The dispute, which left Jarana to calm down what he described as "market panic," reflected the growing sentiment that some of the state's institutions undermined by never be saved.
Leaders say there is little choice but to continue the recovery, given the precarious nature of the airline's debt. As Mr. Ramaphosa warned, failure to pay a loan to SAA would trigger repayment clauses for its other sovereign debt-backed debts, which would give public funds a fund of R16 billion. .
Thabang Motsohi, a consultant with decades of experience in African aviation, said that "the ASA can be saved," but only if politicians were willing to give his leadership the chance to do so. space needed to focus on what worked and reduce mercilessly what did not work.
He added that the company should appeal to Ethiopian Airlines, which "makes decisions very quickly if it decides to implement or reduce a route. Here, it takes months.
Mr. Motsohi, who until recently was Mr. Jarana's advisor, also spoke of successes, such as the domestic PAC market. Despite fierce competition, the company operates a profitable low cost carrier and holds a valuable stake in a regional airline.
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