It’s lift off for Novick and SAA

Former kulula.com now LIFT Airline mastermind Gidon Novick may be a sucker for punishment, but he has taken to turning South African Airways (SAA) around and making it something South Africans can be proud of.

“I’ve already got grey hairs, a few more can’t hurt,” Novick joked, speaking to the SA Jewish Report last weekend, days after his involvement in the 51% buyout of SAA was announced.

Novick and Global Aviation, which partnered to launch LIFT in December, have joined up with Harith General Partners, a private equity firm that invests in infrastructure across Africa, to buy a 51% share of the national carrier. The Takatso consortium will be chaired by Harith’s chief executive, Tshepo Mahloele, and Novick, who was also the former chief executive of Comair. The government will still own 49% of SAA.

SAA was put into business rescue in December 2019, costing the country about R250 million. Late last year, R10.5 billion was allocated to SAA for business rescue. This was released over time, and some of it (roughly R2.7 billion) will be allocated to SAA’s subsidiaries.

The government will have no further financial obligations to the airline. Said Novick, “We will control the company, but also value and respect the input from government as a significant and strategic shareholder.

“No doubt there will be excitement and stress,” he said. “I feel like there comes a point in life where you need to chill or give it a real go and take what comes with that. I believe I’m up for the challenge. It feels opportune.”

He said he was at a unique point in his life where he has both energy and experience. “I have done a few things along the way, and am still young enough to have the energy. This venture will make good use of that energy and experience and hopefully, will be meaningful on a few levels.”

Novick comes from an airline family in which his late father, Dave, was in the industry for 51 years. He took Comair from a company with two aircraft and built it into a major player in the industry with British Airways and kulula.com. As part of Comair, Gidon, a chartered accountant with an MBA from the Kellogg School of Management at North Western University, started the then innovative kulula.com.

In 2019, Novick told financial journalist Alec Hogg that running SAA would be “pretty much the worst job – after Eskom”. However, he did say that if he were ever to take on SAA, “certain things [would] have to be put in place, and one would require the autonomy to make some quite drastic decisions in that organisation”.

So it may not be such a surprise that Novick now says this has always been something “that could emerge or evolve over time”.

He is excited to take on what many may consider to be a dinosaur because, “Government has come a huge way, some of it by necessity, and the dealings we have had have been so positive. I understand it better now, and believe we have a real opportunity for alignment and pulling the right interest and skills together in the private and public sector.

“The best thing is we all have the national interest at heart,” said Novick.

He said real discussion about the SAA takeover started during the COVID-19 pandemic, when he reached out to the department of public enterprises to start talking. “They had put together various advisory teams to look at SAA’s future as it was under business rescue.”

These discussions began before Novick launched LIFT. “I was sharing some ideas about what we could do with SAA. It was very initial, and then we got stuck into launching LIFT, which we are still completely submerged in,” he said.

“At the time, I had been out of the airline industry for a while, and was building an airline model in LIFT that was right for this time. That helped a lot, and became more practical and real in relation to working with SAA.”

To create LIFT, Novick partnered with Global Aviation, a company that leases out fully crewed, maintained, and insured aircraft to established airlines locally and around the world. Then, he met the leadership of Harith that already co-owns Lanseria Airport and was interested in investing in airlines.

“I was introduced to Tshepo Mahloele, its executive director, who said they were interested in SAA and we combined our efforts,” said Novick. Harith committed the finances necessary for the deal.

As to what exactly the future SAA will look like, Novick said, “I don’t quite know yet. We have done a lot of work in planning how things will operate, but there is still mountains to be done.

“I believe in the creativity that exists in South Africa, and the solution will capture the best of the legacy of the SAA emblem and its name. We will infuse modernity and creativity into something all South Africans can be proud of. It will be iconic and fresh, stand out, and be globally recognised.”

Novick said he planned to import some of LIFT’s efficient agile operating model into SAA, among other things. “The customer obsession we have at LIFT will also become a mainstay of SAA,” he said. “It’s critical, everything has to revolve around the customer.”

As for staffing, he said 80% of SAA’s staff had already taken voluntary retrenchment, but, “we need to take a good and careful look at the organisational structure”.

He is clear that the vision for the new SAA is to build an iconic national brand and a globally competitive airline, particularly on the African continent. “It will be a cornerstone of commerce, tourism, and industry.”

He isn’t yet sure how LIFT will fit in, however he says experience and skills will be exported into SAA so that the national carrier can benefit from its learning.

Novick plans to start local flights soon, and get going with regional ones soon after. “Regional flights use the same infrastructure as local, so that isn’t too complicated. The long-haul network will depend on tourism, the opening of borders, COVID-19, and global collaboration.

“I am hoping this initiative becomes a blueprint for future public-private partnerships, and gives all South Africans the confidence we need to continue building this incredible country,” Novick said.