South African Airways best chance to stay afloat could be a joint venture with Ethiopian Airlines.
The Southern African examines the potential merger, excerpt below:
The proposals were made by former SAA CEO Vuyi Jarana. His report, titled “The Investment Case for South African Airways,” suggests that merging with another airline is the SA carrier’s best chance of survival.
“Given the thin margin nature of the airline business, under government control or under government rules, it is unlikely SAA will deliver better margin performance. The government should consider exiting the airline business,”
“The biggest opportunity is to grow the West Africa hub together where traffic throughout Africa is consolidated, before connecting to the US and Canada.”
Ethiopian is so far the strongest candidate for a “marriage” with SAA, which has been rejected by Emirates and Lufthansa. “The biggest opportunity is to grow the center of West Africa together, where traffic is consolidated throughout Africa, before connecting to the United States and Canada,” Jarana wrote.