United CEO Grovels, Alitalia Goes Bust (Again) & SAA’s bunga-bunga

 

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Alitalia – the Pope’s favourite flying machine company with a Republican President who did actually read books.  ©Vatican
Yes, its the age of jump on the bandwagon.  At least once you’re on the bandwagon,  its unlikely someone will knock you out and drag you off semi-conscious.  United Airlines CEO Oscar Munoz’s was himself dragged before the U.S. House Transportation and Infrastructure Committee this morning to answer questions from really aggressive congressmen and women after an incident where a passenger was forcibly removed from one of his airliners.

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Dr Dao – assaulted and thrown off a plane after buying a ticket at United Airlines. ©Facebook
It took Munoz a couple of attempts to apologise to the 69 year-old doctor who was summarily removed from a UAL flight in Chicago – but only after two oafs had managed to smack his face against the arm of a seat, removing two teeth and leaving him bloody and dazed.  United has already reached an out of court settlement with Dr Dao who probably can now pay to have the surgery to replace his two front teeth.

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Another United Employee about to select passengers for disembarkation (no not really but the meme is funny).
United has now instituted a change in policy, now offering passengers up to $10 000 to give up their seats if the airline overbooks.   If I was on board a plane I wouldn’t accept anything less than $10k knowing that the other passengers probably know what I know.  Imagine the auction.   Here’s a possible script:

Pilot X :  Ok,  I’m going to start at $2000 any takers?

FX :  Silence.

Pilot X : Ok,  we’ll raise that to $4000 – come on everybody!

FX: Silence.

Pilot X :  Ok,  we’ll go the whole way – anyone taking it at $10 000?

FX: The sounds of screams as many passengers clamber over each other to disembark.

This moment needs some thought.  It’s one of those really interesting events where both Republicans and Democrats agree government should intervene.  As the US Secretary of Transport signs away laws diminishing airline responsibility (see this),  events have conspired against light touch government.  That’s because Senators and Congressmen and Women take flights on the same commercial airliners back and forth across the US and have found the experience, let’s say, less than welcoming.

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Click for more abuse here.
So both sides of that American political pastiche pie are now calling for action by the government to assist airlines in doing  the right thing.  This has partially come about as competition diminishes and the consumer gets shafted.  I love aviation and what’s just happened in the US is both upsetting and inevitable.   The simple matter is if you give shareholders complete control over business without proper competition,  they cut every corner possible to make a quick buck.  Republican head of the House transportation committee chair, Bill Shuster, has warned that airlines are about to be hit by a one size-fits-all rule to improve customer care.

Alitalia Goes Bust – Again

So its with a heavy heart that I join the Pope in blessing Alitalia because its filed for bankruptcy.  For the third time since 2008.  And its likely to be three strikes and out because the Italian government won’t bail it again and the Pope, who flies Alitalia and blessed the airline in 2008, probably won’t waste his important breath this time around but just shrug and take Lufthansa or Emirates.

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Silvio “bunga-bunga” Burlusconi. ©Wikipedia
Alitalia has cost taxpayers a reported seven billion euros in bailouts.  The big issue in Italy is that Alitalia used to be one of the biggest employers in that country,  but its slipped since being founded in 1947.

The ailing airline has been placed in the hands of the administrators who have to turn it around in 180 days, sell or liquidate the operation.  As with South Africa,  citizens are outraged by suggestions that the state should continue bailing out a loss-leader.    It’s Alitalia’s staff who’re not really helping matters by refusing to consider pay cuts or retrenchments.   From the New York Times by way of Il Sole 24 Ore’s Simone Filippetti:

“It seems that Alitalia workers have all gone nuts.  Why did they reject a plan that involved a hard sacrifice but a chance of recovering to instead face the risk of a total company disruption and liquidation, and ultimately all lose their jobs anyway?”

SAA Haggard & Bereft

SAA,  once the darling of African aviation is now the toothless hag.   It’s a blue rinse Afro with the faint whiff of aunty’s spent nickers in charge.   SAA has become most famous in its home territory for the same sins as Alitalia.  To whit – bailouts.

It also failed to submit financial statements for two years and held its results for 2015/16 back after the Treasury refusal to provide an additional R5 billion in additional guarantees against ongoing loans.  Eventually Finance Minister Pravin Gordhan was pressured into securing that loan in September 2016.  But the parallels with Italy are noteworthy, both national carrier and national disgrace.   Italy was run by a borderline sexual deviant for years (Silvio Berlusconi),   host of bunga-bunga parties for his echelon of friends who cavorted around mansions on tax-payer’s expense. During his tenure, Alitalia dive-bombed banks for two loans.

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More great news from Dudu Myeni, as she appeared on Facebook recently in trademark Afro sans blue. 
Yes, President Jacob Zuma has created his own plethora of putridity by cadre-deploying into SAA, Eskom, SABC, etc etc etc and left himself ethically stranded like a pirate with a platoon of prostitutes on an island without a shower.

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Cmde Jacob Zuma.
One difference is that South Africa’s government has agreed to another round of save SAA Chairperson Dudu Myeni’s face.   In his last budget speech before he was zapped by Zuma,  Gordhan announced that during 2017/18, government will provide some financial support to SAA in a manner that does not increase the budget deficit.

We look forward to seeing how money is thrown at the aviation hole called SAA without increasing the deficit.  Unless it turns around properly,  it won’t be considered a going concern but going going gone and we’re concerned.    The big problem is the airline is now going to have to borrow against an interest rate that is above 8% – or what we generally call “junk”.  But its something to which I’m sure the new Finance Minister Malusi Gigaba, who is a social policy expert, is applying his pedagogic mind.

Enough of this comparison fun and games,  some people have to fly.

 

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