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‘We need South Africans to support their national carrier, much as they support their national sporting teams’ – Gidon Novick

CEO designate Gidon Novick says ‘there are investors looking for good opportunities, whether they be pension funds or banks or private investors or institutions’.

RYK VAN NIEKERK: The proposed partial privatisation of South African Airways remains a hot topic. And the announcement that the Takatso Consortium will take up a 51% stake in the airline has received mixed reaction.

Gidon Novick joins me now. He’s the CEO designate of the new SAA. He is someone with tremendous experience in the South African aviation industry. He was the CEO of Comair. He started Kulula.com, and he is also in charge of South Africa’s latest airline, Lift.

Gidon, thank you so much for joining me. You’ve had a long career in aviation. Did you ever think you would be at the helm of SAA?

GIDON NOVICK: Well, I had a ten-year break, so I had some sanity in my life; but it seems that’s about to come to an end. And yes, Ryk, this is a very exciting chapter, and this is really a big deal. It’s a big deal for the country. It’s certainly stretching my comfort zone. I’m learning about politics – and I think we can do good things.

RYK VAN NIEKERK: I think politics is an important skill to have. But tell us about how this deal came about. When did the parties start to talk and when did your phone ring?

GIDON NOVICK: I met Tshepo [Mahloele] early in the year, We were introduced by somebody who knew that we both had an interest in aviation. We had some interesting discussions and then discovered that we were both interested in SAA. So we combined our forces and fortunately have a good mix of skills. We’ve some good experience and an excellent team in terms of running airlines. And Harith [General Partners] obviously has immense skill in terms of raising capital, managing long-term investments. We struck up a really good relationship.

RYK VAN NIEKERK: But why SAA, because I think there has been a lot of brand damage? Do you think SAA proposes the best opportunity to launch a new airline in the country?

GIDON NOVICK: I think so. Firstly, it’s a brand that’s had an 87-year history in this country, and that’s part of the fabric of the country, and it has had many decades of really good performance. It was a brand that people loved at a point in time. It had an extensive network around the world, it was very strong in Africa, it had a very strong loyalty programme in Voyager, which was probably the strongest loyalty programme in the country. It had some excellent people and a brilliant safety record.

So a lot of good things. I think what we remember, because it’s the recent history, is a lot of the bad stuff. There was a lot of bad stuff, and people rightfully lost trust in the brand, and our job is to win back their trust and get South Africans to support their national carrier, much as they support their national sporting teams.

RYK VAN NIEKERK: That will be a challenge. But can you maybe paint a picture for us? Exactly how do you think the new SAA will look, and what should South Africans expect?

GIDON NOVICK: Well, I think they should expect something that they will be proud of. That’s our objective. I think they should expect something that’s efficient and sustainable. This is a business that is going to be run by private individuals who are commercially driven. So something that’s sustainable, something that doesn’t come back to the government to ask for money – because that is not going to happen, and that’s been made very clear and that’s part of this deal. So it’s got to be something that works as a business and it’s got to be something that works for South Africans in terms of a flag carrier that delivers uniquely South African service and connects South Africa to the world.

RYK VAN NIEKERK: Let’s talk about the politics and the money, because there have been some negative reports about the announcement – and concerns that the responsibility for funding will move from taxpayers to the Government Employees Pension Fund members via the link of the PIC with one of the consortium partners.

Number one, were you surprised at the negativity towards that part of the deal that there were concerns that the buck was just passed from taxpayers to pensioners?

GIDON NOVICK: Well, in truth the response overall has been pretty overwhelming – mostly positive – as you know. I actually find it quite motivating that people care so much about South African Airways. There are good debates going on and people must ask all the questions that are being asked. I think it’s become part of the fabric of South Africa to be a little bit suspicious and ask the questions and get the answers.

In terms of funding, from my experience good business models get funded, good businesses get funded. There’s plenty of capital available around the world – and in South Africa as well. There is excess liquidity, there are investors looking for good opportunities, whether they be pension funds or banks or private investors or institutions. I worry very little about the funding. The funding will be there. Harith has got incredible experience in terms of raising capital and managing capital. Our job is to build a robust business plan that makes it worthwhile to invest in this new project.

RYK VAN NIEKERK: A lot of people are concerned about what happened in the past, where government just kept on writing cheques because it was not managed efficiently. Where in the negotiation process are you regarding the sale of the stake to the consortium? And when will we be able to see the fine print and potentially the involvement of government in the newly relaunched airline?

GIDON NOVICK: In the negotiations – that’s how we got to a memorandum of understanding, the MOU. We are pretty confident that there won’t be any major issues in the due diligence. We’ve already done a lot of the work, but we still need to go through that process.

The deal’s done. The principles are there. We’re going to own 51%, government will own 49%. That’s one of the main issues. The second major issue is that government won’t be funding SAA in the future. Those things have been made very clear. There’s lots more detail which we’ll share over time.

We’ve got to have a good look at the subsidiary companies as well – SAA as a group includes a number of subsidiaries. Part of our due diligence is understanding what’s going on in those subsidiaries and where they fit into the future of SAA. So there’s a lot of work to be done.

RYK VAN NIEKERK: So if, in theory at least, the new SAA runs into financial problems, there will not be a bailout from government – has that been signed and sealed?

GIDON NOVICK:  [Chuckling]. That’s been made abundantly clear to us, and it’s making us even more fired up to have a robust business plan and, most importantly, Ryk, an agile business model. We kind of use these words a lot. It’s so important in the travel industry and in the aviation industry to have a model that is flexible and can adjust to demand as it changes. We’ve seen massive changes in demand. We’re going through a third wave of Covid now, which is impacting air travel in a big way, so we have to be very flexible, very agile. I think with that approach, we really will limit the risk profile of the business and make it a fundamentally different model from a traditional airline model.

RYK VAN NIEKERK: Will it take ownership of SAA Technical and Mango?

GIDON NOVICK: Well, yes. Those are subsidiaries and that’s part of our due diligence. We’re going to take a good look at what’s going on there and how they fit into the future of SAA.

RYK VAN NIEKERK: You are still busy with the due diligence. When do you foresee finishing that process, and when do you foresee having your first planes in the air?

GIDON NOVICK: As soon as possible. There’s a lot of pressure to get up and running. Up until the third wave, the market was coming back nicely globally. As you know, with the vaccination programmes travel is returning. We know there’s massive pent-up demand in leisure travel. Business travel we’re a little bit more sceptical of, and there may well be long-term impacts coming from Covid and video conferencing. We need to get back in the game as soon as possible, so we’re busy with those plans. But in parallel with that, we need to get the due diligence done in the next couple of months.

RYK VAN NIEKERK: I can hear the passion. Were there other parties or other consortia who were also speaking to government regarding the stake?

GIDON NOVICK: I think there were many. I was reading pretty much what you were reading in the press, and it sounds like there was a large number of bidders and interested parties. So yes, I think there certainly was a lot of interest.

RYK VAN NIEKERK: And lastly, you are also the CEO of Lift, which is another airline. What’s going to happen there?

GIDON NOVICK: I’m actually not the CEO. I have an interest in Lift. Jonathan Ayache is the CEO, and he’s a brilliant CEO. So yes, Lift is something we’re looking at. How does it fit into the bigger picture? We’re looking at different options. We’ve got quite a lot of work to do to work out the nuts and bolts.

But the most important thing is to get South African Airways back in the air in a way that South Africans will be proud of it.

RYK VAN NIEKERK: Gidon, thank you so much for your time.

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COMMENTS   75

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Why do I get the feeling that there is a whole lot of smoke and mirrors going on?

How about “We need the Ruling Party to support their national tax base, much as they support their national sporting teams”
or perhaps
“We need the ANC to terminate incompetent cadre deployment, much as they support their national sporting teams”
or even better and much simpler
“We need to see some orange overalls”

Ha ha ha 🙂 totally agree. Hate to also point out that as Tax Payers we have already been supporting SAA even when we do not fly SAA.

Also what a lot of Rah-rah though, who is he trying to kid and has he not realized the mood of people / passengers out there. We do NOT want to hear little anecdotes of how he met Tshepo last year and then the other parties and hey presto. What a lot of BS in my opinion.

I note that the question on whether the funding was going to come from the pensioners was not answered with a categorical no! If not from the pensioners then the IDC? One thing the ANC has shown very clearly is that they cannot be trusted, especially when money is involved.

Sanlam today released a report showing clearly how local stand-alone pension schemes avoid investing in infrastructure projects DESPITE reg 28 recently having been changed to make this type of investment easier. Reason? The funds do NOT trust the favourable “return on investment” figures quoted on these infrastructure projects.
So WHY should the “new” SAA be any different!!!!

Supporting the national carrier is support for the ultra corrupt ANC.

So, no. Absolutely no support for SAA. NOTHING

Utter rubbish! do you want round two of Tax money abuse now?

SAA was for corrupt politicians flying on Tax payer money for holidays with their girlfriends and families, and also flying Tax money to Dubai and Pakistan.

The Tax payers are like abused slaves.

This Tax slave will never fly SAA.

Sorry guys, but when I see the name saa and I know the government is involved there is no way I can support them.
Did anyone ever work out what this saa cost us per person as taxpayer allready ?

Dear Gidon — Leave now with your reputation still intact !!!

Hopefully he can make it work so the pensioners see a return on their investment. It will be interesting to see if he can outlast Mark Barnes??

Doubt he even knows who Mark Barnes is; he seems a bit naive.

Surely they must be joking..is this a TV show? They raided the national coffers with impunity and now ask for our blind faith and support. There’s a lot of winning back of hearts before customers vote with their feet (excuse all those smashed metaphors)..

Also it sounds like they want SAA to swallow up all the smaller players and have a nice state-protected monopoly again. Or what better what to enforce a monopoly than go into a lockdown (grounding all planes) but only bailing out the State airline (like they did last year).

But I do, Gidon Novick!

And i have been for a while…. Its called Tax Payers Money!

And the people who put you in your place have been wasting it!

When Mr Novick pay his personal and company tax double in one year that is how it feel to fly saa…

He won’t have any tax liabilities because his SAA venture won’t show any profit! BUT, as we speak at this very moment, us tax payers are in fact currently subsidising MANGO, SAA’s low cost subsidiary!!!! That’s because Mango has run out of money a while back, but unlike SAA that’s still grounded, Mango is flying with the help of your and my tax (via the BRP process) every time it takes off!!!! Google Mango over the last 3 months – like SAA, it’s a Gordhan pet project….

Well, he’s fairly soon going to have to come up with SOME money; SAA isn’t able to get money owed to it by the Zim government!

This is refunds SAA owes ticket holders who booked seats on SAA from Zim, but lost their money when SAA failed to take off.

The Zim government won’t pay over the money, saying it’s too short of foreign reserves to be able to do it.

So people, this is the time that our dear Pravin and Mboweni had better make sure they get this ticket refund money from Mr Novick! The two ministers SWORE remember, tax payers no longer bail SAA out – so it can only be to Mr Novick’s account!

Maybe we can all become loyal to the brand, as he suggests, and send the proverbial hat around to help him…..

Happy to support this company but only when the 49% shareholder is diluted to zero. Before that no way as its a vote -and money-for Jamnadas, the frog boiling rubbish and the ANC-no thank you!

I find it hard to reconcile the above comments to Gidon Novik to such an impressive CV – qualified CA, top 10% of Wits Class and a fancy US MBA. Smells like the droppings of a bovine animal.

Someone with that pedigree knows easy money when he sees it.

The thought of that “easy money” is clouding his blind spot…”I’m learning about politics”

but didn’t you hear him say the words Agile and Flexible over and over again? that means he’s brilliant

He’s only learning about politics NOW??? He means ANC politics and best he learns as MUCH as possible before he signs…..

Sorry, not going to happen. I have supported enough over the past 20 years by way of taxes to enrich the likes of Jacob, Dudu etc

Been around this block a few times already…….don’t hold your breath.

anc con job.

I don’t support con’s.

Hi Gidon Just 2 questions Were you hoping to make a fast buck out of the tax payer and why stake a good reputation with a corrupt political party?

First, for sure! just as so many before me

Second, as a CA he knows well there is no risk or consequence to a person from “ineffective” or bad CEO.. just ask Jooste

Because he’s in the club now. All aboard the gravy-plane

Maybe he’s a cadre…..

It has a chance because at 51% you make the decisions. I’ll still take this over Gordhan running it with bailouts.
It should have been shut down 10 years ago though and the routes sold.

…exactly, as Richard Quest stated in his Jan 2020 interview at DAVOS.

You are mistaken friend. The PIC owns 30% of Harith. So ‘government’ holdings are still >50%. When the gov and their buddies at PIC use their combined voice they will still have the final say.

It depends who owns the other 70% of Harith. There are enough funds/GPs around where the PIC is an investor. They get a board seat / investment committee, it doesn’t mean they control the GP. On this basis you can’t simply say that Gov controls SAA because of 30% x 51% + 49%, because control doesn’t flow through like that.

However, if the other 70% is held by other SA’ government entities that will follow PIC/Gov decisions then I agree with you.

RSA liberty: that’s what Mr Novick meant when he said he’s learning about politics…..

Others, like a former Eskom CEO (who also has impressive academic qualifications and successful business ventures behind him), also learnt about politics, and we know where they all are today….

We do not need a national carrier!

agree. We need a stronger Air Force instead 😉 Currently there’s only a SINGLE C-130 Hercules in active service.

Bawawah. Can’t see you one can still call it an air force. More air than force? C130 on standby at Waterkloof Airforce Base for the next flight to Dubai?

Please don’t give them any ideas.

You might see C-130’s with extra fuel tanks fly to Dubai and Pakistan to drop off Tax payer money.

Gordhan needs a national carrier – without it, he doesn’t have a job!

There is a difference in supporting The Aircraft Livery bearing your country’s Flag or Emblem, versus supporting the operations of a corrupt ANC-influenced airline company.

Chauvinism, the last refuge of charlatans.

I will never, ever, ever fly SAA again.
Sick of the corruption and I will not support this dodgy deal where the PIC are now going to throw government employees pensions down this black hole.
The sooner it goes bankrupt the better.

Why must I support a carrier that takes away my taxes to prop up a dead idea? Why must I support a racist regime with my money?

Go to Zimbabwe!

As long as the price is good and the service is also good then I am in. I am not loyal to any private or state company since they are both in it for money.

When it comes to flying, I’m certainly NOT risking my precious life with airlines like SAA and Mango with a string of RECENT safety incidents – some very serious – that are still being investigated by aviation safety authorities – no matter HOW good the price and service might be!

There I’m definitely loyal to, and stick with, the airline (not SAA or Mango) that over many years not only upheld safety requirements but went beyond it’s normal duty and avoided any type of playground bullying and unfair competition in the aviation sector. And I’m talking about Safair!

Good luck, you will need it flying the “new SAA”. Flying skills and safety will not be their priority, as was clearly demonstrated to all when the last SAA flight almost ended in tragedy.

Pretty bold request. I, for one, will not only avoid flying SAA but also Lift if this is his attitude.

I wont fly any national carrier again.

So long, and thanks for all the fish.

Not a chance in hell!. Will not only avoid SAA but will also encourage every SA citizen and foreign visitors to boycott them!

Supporting SAA? I’ll support SAA like I support eTolls. Not a chance.

None of this stacks up as a business case. Its Africa. Its SAA. Its run by the ANC-ancer. Its not even post-COVID, we’re in the 3rd wave! Nothing makes sense here. This has got a massive Steinhoff whiff to it. Regardless, I’ll never set foot in a CadreCoffin

Supporting SAA is equivalent to reuse toilet paper, similar to votela cANCer.

Mr. Novick , please do not let the ANC thieves and con artists use your good name to prolong the SAA milking of the tax payers.

Compete for our bookings on level footing:
– no tax money.
– no preferential ACSA access for routes and who allowed to fly where.
– no funny schemes for politicians free flights, they must buy their fights any airline.

Johan_Buys; SAA’s traditional advantage over competitors has not only consisted of free flights for politicians & families; every civil servant employed by government – from police to health to education to the navy and much more – is compelled to use only SAA when flying for a business trip. Nevermind those ticket prices being far more than other airlines, all state officials fly SAA.

Gidon-ya for becoming an ANC Spin doctor, but this taxpayer ain’t along for the ride, thanks! Seems to me that the SA Accounting Board needs to up their Ethics policy by a country mile!!

Mr Novick is smoking something…..

No Mr Novick, we are all long past that old lie: “Dulce et Decorum est Pro Patria Mori”.

We have no National Shipping Line & we dont need a National Airline.
As usual with the ANC Govt , our Ports now also rank in the hopeless category !!! Nothing they touch works .

What Mr. Novick fails to acknowledge is that ordinary South Africans, through countless bailouts over the years, have supported SAA and are fully entitled to say ‘no more’.

I get a feeling of Deja Vu. Mark Barnes at the Post Office comes to mind. He left there in a whimper, tail between the legs. Will Mr. Novic go the same route?
Mr. Novic answering questions like a seasoned politician without making any firm commitments.
And then there is the elephant in the room (many ones in fact): Why did Van Niekerk not ask any questions about the current impasse between the pilots and SAA? Surely you need pilots (taxi drivers?) as well to get this lot of the ground.
On supporting SAA like we support our sports team: Hahahaha That is emotional blackmailing. The sports teams are not the bottomless pit that the SAA has become. Etc etc.

Mr. Novic is now in charge of a flying taxi company. And he does not know it.

Would be great Joseph Goebbels if you can explain your sensorship rules as it really smells like gagging instead of promoting responsible on-line participants. I’m on the verge of starting an online campaign against you. Better come clean and explain why my previous post have been sensored

YOU MUST BE JOKING…….not a movie??

A very emphatic NO. For it to gain my custom
1. Zero government funds
2. Zero BEE INVOLVEMENT
3. 100% listed on the JSE.
4. No politically connected person on the board,
5. no government funding whatsoever,
6. no special tax concessions.
7. No assessed carried forward to be allowed.
8. Ten year undertaking to repay back the misused of the past,

then, maybe, I will fligh on it.

I was treated with distain by the staff. They are very unhappy and exude their feelings upon the traveler’s. You get what you pay for!

One must know something dodgy is going on when “Patriotism” is the reason why people are being asked to support the “new SAA”.
Not safety, not efficiency, not punctuality, not cost, not even crew selected by skills, but rather by race.
The big difference between the patriotic supporting of sport and an airline is that if your national team loses, nobody dies in a fireball.
Appealing to a sense of patriotism as a reason to fly a wrecked airline convinces me even more never to put a foot into an “SAA” aircraft.

“GIDON NOVICK: Well, I think they should expect something that they will be proud of. That’s our objective.”

If that’s the case, Mr Novick, you are simply a PR practitioner. What the SA taxpayer wants is a return of the billions of Rands that got flushed into the pockets of the ANC cadre clique.

We have plenty of sportsmen and teams making us “proud” – when they are not derailed by the administrators once again appointed by the ANC clan.

And if “There’s plenty of capital available around the world – and in South Africa as well.” why did not one SA billionaire or financial management institution like Sanlam, FNB, Coronation or Allan Gray put R1 into this scheme.

As I commented previously – more smoke and mirrors. You are a government employee admit it.

Putting lipstick on a pig. Does he really expect us to fly on an airline cobbled together with obsolete aircraft?

I think both Messrs. Novick and Vorster are hitching their wagons to the wrong train – I respect both, but they’re dead wrong on this one.

If this was a “dripping roast”, it wouldn’t have been necessary to clobber together an entity that WILL in the end tap the civil servant’s pension fund to prop it up. In one fell swoop the taxpayer has been replaced by the civil servant’s pension fund as the party that will pick up the pieces when it falls apart – and guess who’s guaranteeing the civil servant’s pension – you and me, fellow taxpayer…

The sooner we kill off this monstrosity, the better – let’s cut off the oxygen and boycott it…

I’ll still support Lift Mr Novick, but I’d rather walk or hitch-hike from Jhb to Cape Town than support your new “venture” with Government. Remember that when you complete your due diligence…

News24 says today that Gordhan recently told parliament another (wait for it) R14bn – yes, R14bn! – for SAA subsidiaries is needed from US (tax payers) because the new partner refused to take over any legacy issues!!!!!!

Imagine! R14BN still needed down the line!

And the Special Appropriations Bill was passed today (Tuesday) so Mango staff can hopefully now get their long outstanding (fat) paychecks.

End of comments.

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