__________________________________________________________________________________________________________________________________________

Tuesday, April 2, 2013

■ SOUTH AFRICA: Former 1Time founders place blame for airline's demise on BEE investors' shoulders.

1TimeThe former founders of defunct South African LCC, 1Time (T6), have placed the blame for the carrier's demise squarely on the shoulders of the Black Economic Empowerment consortium who acquired a 25% shareholding in the airline.

Former 1Time founders Rodney James and Glenn Orsmond (ex-1time CEOS), Michael Kaminski (ex-1time CIO), who have collectively gone on to found startup Skywise, blamed 1Time's demise on a lack of shared vision brought about by the BEE consortium's lack of aviation managerial experience.
Our strategies and vision to move forward were completely different to the BEE guys and the rest of the board. None of our proposals went through. That’s why we all left. We couldn’t agree on anything, from the strategic things to operations. And they had zero experience.
Source [BusinessDay]

1Time
Backed by South Africa's IDC Industrial Development Corporation (a self-financing, national Development Finance Institution mandated to promote economic growth and industrial development in South Africa), a Black Economic Empowerment consortium comprising Mtha Aviation, SKMT Sunrise Investment Group and Oakleaf Investment Holdings acquired a 25% shareholding in the carrier for ZAR49million in October 2010. It was intended that this money would be used in expanding 1Time's operations and purchasing additional new more fuel efficient Boeing 737-300s to replace its ageing fleet of McDonnell Douglas MD-80s.

According to Mr James, shortly after the buy-in was concluded, the IDC's brief changed, with the funding being diverted away from fleet renewal - a critical mistake given the sudden rise in fuel prices at the time.

In their defence, Glenn, Rodney and Michael said:
Glenn presented the Board with a five-point plan to restore viability in the high oil and taxes environment. This involved improving aircraft utilisation, optimising the schedule, growing ancillary revenue, reducing overheads and reducing headcount. Unfortunately the new team took the worst possible approach – they reduced capacity while simultaneously increasing overheads.
Source [TNW]

However, a report published by South African trade union, Solidarity, shortly before 1time collapsed, blamed failures on both the old and new management and said neither "had a clue about running a budget airline."

1Time is still in liquidation, with Pan-African LCC, fastjet (FN) in negotiations with local South African investors to form an investment vehicle that aims to assume 1Time's debt as well as its operational licences.

No comments:

Post a Comment