Monday, 27 October 2014

What's wrong with SAA?

So after a brilliant weekend at home with the family, I find myself on the road again. Well, not quite on the road, there was a little bit of air involved too.

I'm wondering about the idea of more people commuting between George and Johannesburg. Let's put it this way. I left home at 07h00 this morning and was in Pretoria at 13h00 for my first meeting. The ticket and the car hire cost me less than it would to drive and I saved roughly half the time. If I hadn't forgotten the PIN for my tablet, I would also have done a few hours of work. (Amateur mistake)

Will more people start to do this as the Western Cape becomes more attractive to business people... I have little doubt if I look at the people that were on the plane with me today. It's a great recipe - golfers flying south for a week of golf and businessmen flying north for a week of work!

I digress.... back to the subject, this trip got me thinking. Kulula has been going for some years now and by all accounts is doing fairly well. Despite competing against a subsidised airline, they manage to make a profit.

So what is the catch? I mean surely it isn't rocket science to copy a winning recipe I hear you say... Perhaps, but why then did 1time and Nationwide see their tailpipes? (I guess an engine falling off a plane helped Nationwide along to the history books!) They all had the same playing fields and rules, but one made it and the others folded.

What is it that makes one player in a tough industry succeed where others fail. I mean look at SAA, every year the bailout seems to grow. Now I'm no aviation analyst, but I enjoy reading the SA Flyer magazine. They have done a fair number of articles on the subject and it seems that it boils down to certain routes that the government forces SAA to fly (direct to Beijing being one) and also the older aircraft that they use.

Kulula fly all the very popular routes and I have never seen an empty seat on one of their flights. I have done a number of flights with SA express (in the same crisis as SAA) and there are often open seats.

Kulula also have cool, innovative ideas. Look at their principle of paying for on-board snacks and for pre-booking your seats. It's 70 bucks for your seat - not bad if you get to book an emergency exit seat with heaps of leg room. I'll pay that any day rather than hoping one is available at SAA when I check in. Their website also combines pretty awesome deals that are relevant to the traveller. I booked my air ticket and car hire through them and got an incredible deal. Everything about them shouts "Innovation". They are original ..... fresh. People like that. And everyone likes a good bargain too.

I'm pretty outspoken in my criticism of the media being incredibly negative and being a major player in the negative mindset that seems to pervade South Africa at the moment, so I'm not going to go further down that route. I'll focus on the positive - there must be something.

Well, Kulula is a success story. That's positive. Invest in Postnet .... that will certainly be positive in the not too distant future. Generate your own energy and get off the grid if you can. Plough energy back into the grid and you will be making a killing in the future. Esentially whatever is a parastatal organisation at the moment .... invest in the privatised version.... it's positive growth is inevitable.

What are your thoughts? Privatise SAA, simply close it down or keep bailing it out?

Do yourself a favour and Google "SAA financial crisis" - you will see articles almost every 6 months to a year.

On the other hand Darren (said with a Naas Botha accent), it would seem that this is not uniquely South African. See the article on Quantus airline in Australia making a huge loss. Malaysian airlines .... well, the less said the better. A run of bad fortune?

Read this article in the engineering news to see that Kulula are doing well. It seems that they are an organization that has a strong focus on improvement. I have always said, if the mining industry handled accident investigations like the airline industry, there would be even more significant improvements. Perhaps this should extend to focusing on productivity in the same way that Kulula seem to.

Do I have the answer? Clearly not, but one thing is clear. I'm going to support Kulula as long as I can. It's nice to back a winner .... or what do the Western Province rugby supporters say to that?

Proverbs 4:6-7 “Do not forsake wisdom, and she will protect you; love her, and she will watch over you.  Wisdom is supreme; therefore get wisdom. Though it cost all you have, get understanding.”

1 comment:

  1. Another good article on Kulula success factors: