[Column] Tabassum Qadir: South African Airways ship is sinking, but there is a life raft
The South African Communist Party (SACP) has called for workers' rights to be fully protected while at the same time pursuing the turnaround of SAA. It describes alleged job cuts that could take place at SAA as part of an attempt by the Business Rescue Practitioners (BRPs) to make the airline sustainable as ‘untenable’ and called for ‘alternatives’ to be found after ‘meaningful’ consultation with unions.
While it may seem an untenable position, what few people don’t know is that there’s an alternative: Equity Crowdfunding.
What is Equity Crowdfunding?
‘Equity Crowdfunding’ is an alternative method of raising capital. It is a way to source money by asking a large number of backers to each invest a relatively small amount and receive equity shares of the project. It is also an alternative because investors in Equity Crowdfunding don’t look into detail at collateral or business plans, but at the ideas and core values of the project.
With equity crowdfunding, t is not just about connecting projects and capital, but the subsequent positive effects on labor inclusion, especially among the most vulnerable labor groups.
South African Airways is undisputedly a source of national pride. It is the holder of the highly coveted international Skytrax ‘Best airline in Africa’ award since 2002. In 2019 it also won the ‘Best airline staff in Africa’, ‘Best cabin crew in Africa’, ‘Best airline cabin cleanliness in Africa’ and ‘Best business class lounge in Africa’ Skytrax awards. It transports almost 10 million passengers per annum and employs 5000+ employees, making economic activity possible and contributing significantly to tourism and other industries, which in turn aids job creation.
Sir Richard Branson, founder of the Virgin Group: ‘It’s incredible how this new format of fundraising has helped so many businesses find the cash and support they need. We spent many hours at Virgin pleading with banks to extend our overdraft and to loan us more cash to continue to grow companies like Virgin Records and Virgin Atlantic. Had crowdfunding been around when we were launching Virgin businesses in the early days, we definitely would have made use of it. In fact, the first ever (unofficial) Virgin Atlantic flight was actually crowdfunded. It wasn’t a slick operation like the crowdfunding platforms around today, but it did the trick.’
South African politicians, senior management and board members all appear to have failed to turn the entity around, and so we should consider the wisdom of the crowd to decide whether to rescue SAA or not.
Tabassum Qadir is the former chair of SkywiseAirline that she co-founded as a 100% female-owned low-cost airline in 2014. She is currently the CEO of Uprise.Africa.