Guy Leitch
After Dudu Myeni, Glenn Orsmond may be one of the most hated people in the South African airline industry.
He was the founder CEO of 1time Airline and twice the CEO of Comair. Both airlines failed spectacularly. In this book he explains – in his words – how they crashed – and provides many other amazing insights into the airline business in SA.
The airline industry is notoriously difficult. Richard Branson famously said, “The airline industry has made more millionaires – out of billionaires – than any other.”
Airlines are capital and skills intensive, yet they have paper-thin margins that are frighteningly vulnerable to external threats and changes in the environment. A sudden increase in the oil price can threaten an airline’s survival, and many airlines did not survive Covid. A good airline needs a strong balance sheet -which needs a profitable bottom line.
Glenn Osmond is an accountant, who by his own admission, struggles to tell a Boeing 737 from an Airbus A320. He reckons running an airline is all about profits – and if we are honest, he is 100% correct. Without profits there is no airline – unless you are SAA.
Glenn got into the airline industry when he was assigned the Bop Air (later Sun Air) audit as an accounting clerk in the early 1990s. This was at the beginning of airline deregulation in South Africa, and so this book covers 34 years of the ‘take no prisoners’ fight for survival by South African airlines.
Osmond provides fascinating insights into Comair, for which he worked three times – twice as CEO. The airline was hugely proud of its world-beating unbroken 70 year profit history – and then it all fell apart. Many blame Orsmond – especially the pilots and the unions.
After Sun Air’s collapse (murder?) at the hands of SAA, Orsmond was one of the three founders of 1time, the second true low cost carrier in SA (after kulula.com). Like all good LCCs, the new airline was brash and innovative. It hired staff based on attitude, rather than experience or qualifications and so, in Osmond’s words, it ‘avoided contamination by personnel from other airlines’. The joke was that you had to be crazy to work for an airline, so there were no psychometric tests.
1time was under-capitalised and was therefore operating cheap but fuel-inefficient MD-82s. Faced with predatory pricing from SAA and Comair, there was conflict amongst board members. The new CEO was Blacky Komani, who Orsmond described as a ‘great guy but his fatal flaw is that he wanted to be liked,’ which was not going to be good for the bottom line. Orsmond left 1time on 1 September 2011.
A fascinating insight is that in 2012 Orsmond and others from 1time got a new air service licence to start an airline called Skywise. They presented a business plan to Safair as they wanted to lease aircraft – but Safair strung them along and then used their plan to start their own airline in 2013 – FlySafair.
Orsmond then was approached to be the CEO of Mango and was about to be appointed when the Dept of Public enterprises operating – you guessed – on Pravin Gordhan’s instructions, stopped his appointment. The very competent Nic Vlok resigned in disgust. Then Mango’s R1 billion cash reserves, built up under Nico Bezuidenhout, and which would have probably enabled it to survive Covid – was plundered by SAA.
After four years on the Wild Coast, Glenn was enticed back to Comair, which “had grown fat and inefficient.” The airline had “become arrogant and made the bad decision to buy eight Boeing 737 Maxes. Its staff had swelled, yet customer service was bad, as was on-time-performance. The pilots called the shots, and the ground staff were unionised and had a ‘not my job’ attitude. He memorably describes SAA pilots as a ‘pantheon of self-anointed demigods’ intent on minimum work and maximum lifestyle, justified in the name of safety.
Orsmond was appointed joint CEO with Wrenelle Stander. Having two very different CEOs was never going to be an easy relationship, given the different directions the board was being pulled and pushed. Glenn survived Wrenelle and was thus the sole CEO when it collapsed.
Covid brought an end, and business rescue, to this episode. Orsmond then planned a new low-cost virtual airline that would lease aircraft on demand and operated only on profitable routes. This emerged as the new airline, Lift.”
Despite heroic efforts, the Comair restart failed. As I wrote at the time, the biggest challenges airlines faced from Covid was not the lockdown, but the restart, when costs suddenly increased with the resumption of flying. And then there were further waves of Covid and Omicron.
Boeing played hardball with the ruinous order for eight new Maxes and the banks were intransigent. Orsmond says that the lawyers and business rescue practitioners made obscene profits – at the expense of a business already on its knees.
Then Comair had a double dose of plain bad luck. It had two in-flight engine shut-downs in quick succession. Whether these were actual engine failures or just instrumentation failures, Orsmond unfortunately does not say – he is after all an accountant. Seeing the vulnerability, the CAA pounced. With a dysfunctional board and unsympathetic banks, Comair collapsed on 31 May 2022.
Orsmond blames earlier bad decisions, the pilots, the unions and the CAA. Orsmond reckons the CAA attacked Comair to divert attention from their multiple and egregious failures that killed three of their own employees in the George Citation crash. I reckon they were acting at the behest of the ANC government and trying to kill Comair to make life easier for SAA.
“The difference between the CAA’s attack on CemAir and Comair was that CemAir had an alternative revenue source in its charter business, whereas Comair was already on its knees after the Covid lockdown, with the slower than expected restart, combined with the disastrous purchase of eight Boeing 737 Maxes. Like a hyaena with a wounded antelope, Comair stood no chance of survival after the CAA destroyed the vestiges of its reputation by grounding it.”
It may be unpopular to say so with those who automatically choose to disparage Glenn Orsmond, but I really enjoyed this book. It’s an easy read and it provides a fresh and fascinating insight into the dog-fight that has been the airline industry in SA over the past 35 years.
If I have any criticisms, it is that the title and the cover are clichéd YouTube click-bait. And it is in urgent need of an index, as there is so much useful information that you will want to go back and check it.
The book is available for R310 from all good book stores. Ignore those knockers who have not read it – and have judged it by its cover. For anyone interested in the airline industry, this book is essential reading
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