TIR September17.pdf - Page 15



Personally Speaking
by John Wardall
Are they really going to pay us to fly?
M
inister of Finance Malusi
Gigaba who, you may recall, did absolutely nothing to sort out SAA or any
of the other parastatals when he was the
minister of public enterprises, revealed last
month that the government would recapitalise the airline, even though there is no
sign of even a potential turnaround at the
terminally sick national carrier.
By the end of last month, a further R9billion in loans became due and, with financial institutions running for the hills, the
government will have had no choice but
to bail out the airline again, unless it was
prepared to let the floundering parastatal
go under, with all of the dire political consequences of lost jobs at the carrier itself and
at its local suppliers. But it is a bottomless
pit.
The dapper little minister also said a new
CEO would be appointed before the end of
the month. Pass me the smelling salts. After
getting on for two years without one, it is
about time and may or may not have happened by the time you read this.
Regardless, I doubt it will be anyone with
the experience and stature in the airline
industry, the only possible salvation for the
airline and, even then, a long shot.
The right sort of airline candidate, with
the sort of track record required, is a rare
commodity and, as the government was on
the search, the top job at EasyJet became
open. Which would you choose?
And why Dudu Myeni has been allowed
to continue to chair the organisation for so
long is beyond me. It certainly has nothing
to do with competence or good governance. Gigs has now said her term will not be
renewed but, too little, too late.
Really, the only solution I can see is to
sell it lock, stock and barrel. In that case,
despite the challenges, there might well be
a major international carrier, with all of its
expertise and unencumbered by political
baggage, to buy it and properly integrate
SAA with its own operations. Emirates had
shown interest a couple of years ago but the
government blew it by insisting on retaining
control.
What commercial organisation with any
sanity is going to put up with that? Another major airline coming to the party now
seems as far away as ever and will be as long
as the government demands holding on to
the majority ownership and imposing its
misguided direction on management. That
is as long as a piece of string.
The days of state-owned airlines are long
gone and the strategic-asset argument just
doesn’t wash anymore.
DL AD0075 260x98x3 Travel Industry Review Final.indd 1
PS
Nothing illustrates the impact of online on
retail industries than Amazon. 30 percent
of all retail sales are expected to be online in
major global markets by 2030 and 20 to 25
percent of all shopping malls in the US are
forecast to close in the next five years.
Although South Africa is less advanced,
due to the reach of electronic communications here, the country’s real travel market is
not immune and no further proof is needed
that travel retailers have to continue to
refine, expand and creatively develop their
online presence with some urgency.
It is interesting to note, however, that
Amazon, the alpha and omega of retail
Many of our traditional markets have
probably reached most of their potential
growth already, so much of the growth in future is going to come from China and other
developing markets.
PS
I was delighted to get an invitation to Club
Travel’s 30th anniversary and awards dinner
last month. Founder and MD Wally Gaynor
is one of my favorite people in the travel
industry.
He is creative, dynamic, forward thinking
and, as you will read elsewhere in this issue
has done a remarkable job of building Club
into the retail powerhouse it is today.
He is also a modest and humble guy and
TIR Editorial Director John Wardall (left) and Associate Editor Dominic Wardall with Jo
Fraser, head of Club Travel’s franchise and affiliates division, joined the group’s 30-year
anniversary party.
business, is also increasing its bricks-andmortar businesses to complement its online
business and stamp its presence directly on
the high street.
PS
We all know the Chinese market is huge but
it is hard to get a mentally visual picture of
just how massive it is.
Think of South Africa’s general aviation
airport network; now think China is to build
900 more of those airports in just the next
three years!
For a long time, I questioned the advisability of South Africa’s inbound suppliers
spending a disproportionate amount of
their marketing investment in the potential
Chinese market. But things are changing
fast and I am having second thoughts.
it was a pleasure to see the tremendous atmosphere, culture and camaraderie he has
built amongst staff, ITCs and affiliates.
Club has benefited from the advances
in technology by adapting and utilising the
opportunities it provides, a lesson for many
other retailers of travel.
PS
I thought it was a joke when I first heard it
but the CEO of Icelandic low-cost airline
WOW, Skúli Mogenson, told Telegraph
Travel in the UK that budget carriers in future might not only reduce fares to zero but
could even pay passengers to fly with them.
The rationale is that ancillary services and
bookings through the airlines for ground
product such as hotels and car hire could ultimately account for more revenue for them
than their own fares.
It would depend on passengers using the
carriers for their total travel buy and reporting on their experiences on social media,
providing powerful customer feedback and
advocacy.
The urgency to attract more passengers
and provide additional incentives comes
as competition from and amongst the lowcost airlines is growing at an unprecedented
rate in Europe, across the Atlantic and in
Asia.
It certainly shows the importance placed
on social media and, as in every other field,
how digital solutions are being adapted and
increasing exponentially.
PS
There was a right old kerfuffle last month
when Qatar Airways CEO Akbar Al Baker,
probably the most unloved of the major
airlines’ bosses by his contemporaries, went
knocking on the door of American Airlines
CEO Doug Parker wanting to buy up to 10
percent of the US carrier.
He was metaphorically shown the exit
and followed up in his uniquely diplomatic
fashion by saying the his counterpart was
“frightened”. But it didn’t end there.
American, Delta and United Continental
are key players in the Partnership for Open
& Fair Skies, which is pressuring the US
government to take action against all of the
Gulf carriers, which they claim are unfairly
subsidized by their governments, enabling
them to expand in the US market and putting the US airlines at a competitive disadvantage.
A major problem in getting the US government to respond is that the Gulf airlines,
directly and indirectly, contribute to so
many jobs in America.
A verbal scuffle has ensued with Mr. Al
Baker referring to US airlines as “crap” and
saying that, if you fly on them, “you are
always being served by grandmothers”,
whereas the average age of Qatar in-flight
cabin crews is only 26.
The fallout has been predictable and the
spat continues.
American has now given notice to end
its codeshare agreement with Qatar and
Etihad. But Qatar, which already owns 20
percent of British Airways, Iberia, Aer Lingus and Vueling parent company IAG, is
still showing interest in American and both
airlines remain members of the oneworld
alliance.
The plot thickens.
continued on page 16
TIR Southern Africa

06.07.17 14:07
August 2017
15

Delta Airlines





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