It appears that 1time Airline ignored a plan that could have returned the low budget airline to profitability within months. Gross mismanagement by 1time’s founders and its current owners are to blame.

And to think, 1time’s founders are already planning on launching another low budget airline. The cheek.

Christo Ebersöhn was advised by trade union Solidarity back in September to assess the viability of the airline and through his investigations, he said that 1time wasted millions because of poor management decisions by its current owners and founders.

For his probe, Ebersöhn was granted full access to 1time’s records, and he and his team presented the airline with a plan that had the potential to turn a six-month loss of R18 million into a six-month profit of R40 million.

But 1time management ignored it.

At Ebersöhn’s disposal was a chartered accountant that is also a commercial pilot, and another economist who consults in the aviation industry, amongst others.

Said Ebersöhn:

I am very upset that our proposal wasn’t even considered. I think by then they’d made up their minds that the airline must go under. It is appalling to see that management incentives are paid out annually in a struggling company where there is no structured performance measurement or any accountability.

Here is a brief summary of some of Ebersöhn’s findings:

• 1time subsidiary Jetworx employed 422 maintenance staff to maintain the airline’s remaining seven aircraft;
• 1time poured money into Jetworx to keep it afloat. Staff had little to do and only 70 were, in effect, actually working;
• The airline needed no more than 35 maintenance staff, and should have lowered its salary bill for Jetworx from R2,5 million a month to R600 000;
• Five aircraft of 1time’s fleet were already grounded and were “cannibalised” to keep the others in the sky;
• 1time pilots flew only 50 hours a month, compared to SAA and Comair pilots who fly up to 100 hours a month. 1time could have saved R11 million on pilots over a six-month period;
• The airline was plagued with poor credit and risk management, and large amounts of money were wasted, and;
• “Lack of knowledge and basic incompetence has resulted in major corporate and financial risks being overlooked and not migrated,” said Ebersöhn in his report.

Further to this, the report states:

Things that are important like corporate risk and cash flow management are left at the mercy of less important matters like complaining and blaming uneconomical MD80 aircraft.

Glenn Orsmond, one of the 1time founders said:

My departure [from 1time] 14 months ago followed on the heels of the founding directors losing control to the current consortium. I differed with the new team and board on the appropriate strategy going forward and expressed concerns regarding certain corporate governance issues. Nevertheless, my parting was amicable, based on handshakes all round and mutual good wishes. I am extremely proud of our record at 1time over the seven years we ran the group.

The 1time founders blamed 1time’s failures on a number of reasons that included “the high oil price, exorbitant increases in airport taxes, losses at Jetworx over the past year and the inexperience of the management team which had replaced them.”

However, Ebersöhn said that both the old and new management had no clue about running a low cost airline. 1time CEO Blackie Komani and the court-appointed liquidator Aviwe Nyamara did not respond to requests for comment on Ebersöhn’s report.

While these contributing factors certainly had their part to play in the demise of 1time, you may want to hold off investing in whatever they come up with next for bit.

[Source: Fin24]