Delta talks a good game about the evils of government subsides. But you have to wonder, then, why a blatant case of a government propping up a failing carrier on a route Delta competes on doesn’t even merit mention.
South African Airways is the beleaguered state-run carrier of South Africa. It perennially loses money, to the tune of $1.5MN/day. But like Alitalia, it is propped up by the government for reasons of national pride and because of the ripple effect of jobs in a fragile economy. The South African government has once again bailed out South African Airways. This isn’t the first time and it probably won’t be the last time either. The$176MN loan will only tide over SAA for a few months.
While the intrigue between South African’s failed leadership and the failed ANC ruling party is an interesting discussion, let’s focus on Delta here.
Think about it. Delta flies to JNB, South African flies to JNB. South African only exists because it is propped up by the national government. Per Delta’s logic, doesn’t that put American jobs at risk? Doesn’t that a constitute a gross crime against humanity because were demand to sufficient, no subsidies would be needed?
I can anticipate the response: South African Airways is a small player. Unlike the Gulf Carriers, its weak financial state reveals it is not really a threat. Furthermore, its problem is not excess capacity to drive out competition but simply horrible mismanagement.
But I hope you can see the disconnect in that logic. One of Delta’s primary arguments is that if the U.S. government does not act, Delta will lose more routes and every route lost costs 150,000 American jobs (per Delta). South African is flooding the market with half-empty flights to New York and Washington, DC, placing pricing pressure on Delta’s Atlanta to Johannesburg route.
CONCLUSION
The inconvenient truth is that Delta doesn’t give a rip about subsidies. That’s why it partners with Aeroflot, Alitalia, China Eastern, and Saudia. That’s why we don’t hear a peep about South African Airways. But the Gulf Carriers offer a compelling product that is so attractive it becomes a “threat” to greedy Delta’s billions in profit. Another example of hypocrisy in the debate over subsidies.
> Read More: A Dishonest Smear in the Fight Over Gulf Subsidies
> Read More: 10 Ways Taxpayers Subsidize U.S. Airlines
Also see:
> Read More: Exposed: Shameful Double Standards on Airline Subsidies
> Read More: Will US Airlines Now Boycott Alitalia?
image: Aero Icarus / Wikimedia Commons
I really wish the US Goverment would open the domestic market to foreign airlines. I would love to see the Big US 3 facing some competition inside the US. Let the customers decide who survives.
I agree.
No way. US is one of the protectionist government on earth. All the talk of free trade is just a gimmick. Hypocrite.
South Africans is not a hub like UAE Qatar etc. They have multiple flights a day to multiple cities in the US. Furthermore they have a high number of connecting passengers. I. E Asia or Australlia
I think the comparison you make doesn’t stick at all.
South Africans usually is the higher cost Airline anyhow. You would agree that that is very different looking at Qatar with endless specials or the other Gulf Airlines and also one of Deltas main arguments why it disagrees with state Airlines. South African has been loosing ground to all Airlines Gulf BA and I would think Delta too.
I don’t get your arguments.. Don’t see any of them stick.
A clumsily made point. SAA also doesn’t fly the ATL-JNB route, so DL has no competition whatsoever on its only route to South Africa. The fact that both airlines fly from JNB is largely irrelevant. The complete lack of competition is why DL wouldn’t ever bother to complain.
To reinforce how clumsy this clickbait headline is, DL actually wants and needs SAA to be viable if its customers are to proceed anywhere else from JNB into South Africa.
This isn’t one of which to be proud, I’m afraid.
Sorry, I disagree. The competition is for US traffic. SA’s subsidies pull traffic away from Delta. British Airways Comair operation and other LCCs can handle the void SAA would leave.
Looks like the DL apologists are out in force today…
Tough american host a number of excellent high education such as harvard, yale, and others, let’s be real. Delta, its management, employee and supporters are not the brightest bunch. They might even realise south african airways exist. Hell, they might even don’t know where south africa is.
How can you protest something you don’t know?
Because South African Airways doesn’t kick Delta’s butt.