The Folly of the State-Owned Airline
Skift Take
The government of South Africa is adamant the country needs a global airline as a matter of national sovereignty. That has been a costly decision. Is it necessary?
Does every country need a full-service international airline?
If you listen to folks in South Africa, the answer is yes. And I'm not sure I blame them. Their national, government-owned airline is a mess, having lost money for six consecutive years. But few want to see South African Airways disappear. Heck, few even want to see it drop its Hong Kong flight, even though the airline's CEO told me last week it does not perform well.
For a story published Tuesday, I asked South African's new CEO, Vuyani Jarana, why the government is so intent on saving the airline. Wouldn't it be better to close it and allow new entrants to fill the market? Maybe the new airlines wouldn't fly to Hong Kong, but they'd likely fill the gap for short-haul flights. Isn't that enough?
But he said it is not. A country like South Africa, he said, still needs a global airline, even if it's state-subsidized.
“It’s the role SAA plays in South Africa and on the continent,” Jarana said. “It still plays a very cri
