South Africa told to look to Ethiopia to rescue its airline

South Africa should act to preserve its insolvent national airline and seek to partner the carrier with Ethiopian Airlines Group, according to a study commissioned for ruling-party lawmakers. The assessment was prepared by African Aviation Services and dated Oct. 4. It was presented to a group of African National Congress lawmakers on Monday, according to an ANC official. SAA went into administration in December and now needs more than 10b rand ($603m) to restart, according to a plan produced by the carrier’s business rescuers. The airline hasn’t made a profit since 2011 and has been surviving on government bailouts. “There is inherent value in an existing airline which cannot be easily replicated in a new replacement carrier,” Nick Fadugba, the CEO of African Aviation and the author of the study, wrote in the document. “After a thorough analysis, our preferred strategic equity partner for SAA is Ethiopian Airlines.” Ethiopian Airlines shares a similar “pan-African vision” to SAA and is Africa’s strongest carrier, Fadugba wrote. “South Africa has the strongest aviation market on the African continent,” Fadugba wrote, citing research that shows that five of the 10 most lucrative routes in Africa are in or from South Africa, three of the continent’s 10 busiest airports are in South Africa and six of the 10 busiest routes are in or from the country. Ethiopian Airlines is willing to provide planes, pilots and maintenance services to SAA, but doesn’t want to assist with paying off its debts and meeting the costs of cutting its workforce, Tewolde GebreMariam, the airline’s CEO, said last week.<br/>