When it first began, the contest to take a 20% stake in South African Airways (SAA) had seemed like a straight choice between the rival global alliances. Yet, as a decision nears, it seems that the contest is leaning in favour of a bid which does not require the carrier to tie itself down to any specific airline partnership.
Parent company Transnet admits to having drawn up a shortlist of four contenders, which sources believe to be the Lufthansa/Singapore Airlines consortium; Swissair; the Texas Pacific Group (TPG),headed by US entrepreneur David Bonderman; and American Airlines.
Saki Macozoma, who heads Transnet, has hinted that Bonderman has the edge over his rivals in that he does not insist on SAA joining any specific alliance. Neither does Swissair, but the European national carrier cannot match TPG's financial clout.
"There is no single alliance today that makes total logic. This is going to be an issue of major negotiation. If alliances want to insist that we belong to their grouping exclusively, it may not make sense to our operations in the USA or South-East Asia, while it will have obvious benefits in Europe," says Macozoma.
Bonderman says that he would encourage SAA to form alliances "with anyone it chooses - as long as it benefits SAA and is not limited by alliance rules". That raises the possibility of accepting the weighty offer from TPG, which is backed by $8 billion in equity capital, but still joining the Star Alliance.
Bonderman does not hide his distrust of global alliance benefits, at least for junior members. "There is definitely an attitude of 'we own 20% of you, you don't own any part of us', which has a bearing on how fares are divided on multi-destination legs between the partners," he says.
TPG has influential stakes in America West, Continental, Northwest and Ryanair. Bonderman also says that a holding in Irish leasing company AerFi provides options to acquire Boeing 747-400s for $20 million less than SAA is able to command with its own limited spending power. Also, he says that SAA paid interest on borrowings at about 19%, which could be halved through TPG's finance house. "We fix airlines. That's our business," says Bonderman.
Source: Airline Business
