‘New airline replacing SAA’ could cost us R21bn – govt respond to claims

The DA has been rattling a few cages on Monday, and the government was forced to issue a blunt response to figures shared by a party member of the Standing Committee on Public Accounts. Alf Lees has claimed that the ANC is preparing to bail-out the ‘phoenix project’ centred around SAA to the tune of R21 billion.

How much will funding a new airline cost?

The MP states that more than R16 billion in public money will be used simply to write-off existing debts, and the rest will be spent of retrenchments costs and stimulus initiatives to revive the state carrier in the age of COVID-19. The so-called ‘new airline’ will be a resurrected form of SAA, but things may operate differently.

According to the draft business rescue plan, “government has agreed to” provide funding for the following: ?#Level3 pic.twitter.com/22SQc6s5w2

— Democratic Alliance (@Our_DA) June 1, 2020

What will happen to SAA now?

According to Lees, Pravin Gordhan is pulling out all the stops to force through the closure of SAA in favour of a new, state-funded project. The public enterprises minister is even accused of hijacking the business rescue process:

“Renewed plans by the BRPs calling for the establishment of a new airline are hardly surprising. It follows a political campaign to discredit the business rescue process and resurrect the folly of failure by calling for the establishment of a new state airline. SAA will continue to be a fiscal black hole for years to come.”

“This proposal is part of a plan for a re-imagined ‘new airline’… That the BRPs are now singing from the same hymn book as Gordhan clearly shows that the minister has hijacked the process. The insanity that is the ‘rescue’ of SAA, on the basis laid out by the BRPs, should not be given any serious consideration.”

Alf Lees

New airline latest: Government unimpressed with SAA claims

However, a statement was released earlier on Monday by the Public Enterprises Department, and they were wholly unimpressed by Lees’ proclamation. They stated that ‘no decisions’ have been made on any of the aforementioned proposals, but the creation of a new state carrier was their desired outcome:

“Government hasn’t discussed a plan and no decisions have been taken on some of the proposals featured. We embrace the restructuring process as part of a path to a new, dynamic and financially viable airline.”

Public Enterprises Department