A model for privatisation of state-owned enterprise : the case of South African Airways

Abstract

Many State-owned enterprises (SOEs) in South Africa including South African Airways (SAA) are facing challenges associated with financial performance resulting in adverse effects on business sustainability. In an attempt to resolve the poor financial performance challenges that have affected SAA, this study established the financial performance of the enterprise between the years, 2010 and 2019. The intention was to design effective business strategies by way of making meaningful, practical and theoretical contributions towards developing SAA privatisation model in order for the company to retain good financial status. This also follows the realisation that state-owned approaches to business management have failed business operations of SAA. The study utilised document analysis comprised of legal documents that guides the operations of South African state-owned enterprises including SAA and literature review which focused on the topic of the study from 2010 to 2019 since this was the period under study. Qualitative data from purposefully sampled interviewees comprising of the Deputy Director General and the Chief Risk Officer from the department of Public Enterprises, Director General and the Chief Director: Aviation, Safety and Security from the department of Transport, Chief Financial Officer and HoD: Financial Accounting from SAA and Three Political parties from ANC, DA and EFF making a total of 9 was also analysed and triangulated with results of document analysis and literature review. The results indicated that although there is a supportive legal framework that govern public ownership of enterprises in South Africa including SAA, implementation is a challenge. Results also indicated that SAA financial performance was a failure between 2010 and 2019 because of the constant losses made during the same stipulated period. A Deregulated full privatisation model was developed and recommended for implementation in order to resolve SAA financial problems making use of the systems theory.