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South African Airways needs more than a government bailout to pull it out of the financial mire

Analysis

South African Airways bears all the scars of a government-owned legacy carrier in terminal decline, accelerated by continued political fumbling and interference which in Sep-2012 resulted in the mass board walkout and the resignation of three top executives, including its CEO.

The flag carrier is deeply mired in debt, bereft of a positive outlook. A temporary sop of a government guarantee is unlikely to support a turnaround in 2013 and offers little hope of improvement in South Africa's troubled aviation sector while government fumbling continues. Moreover, subsidy of one airline - by providing government guarantees - in a supposedly deregulated domestic market only serves to destabilise competitive operations.

That does not offer a sustainable recipe for an airline industry in a country which relies heavily on dependable commercial air services to support economic activity. Yet, unless its masters in Pretoria miraculously gain, and apply, a clearer vision for SAA, the future promises only the continuing decline of a once proud airline.

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