Photo: GCIS
Photo: GCIS
The future of SAA hangs in the balance, as it has been doing for quite some time – but the sharks certainly seem to be circling closer on Friday. A presentation before the Standing Committee on Finance suggests that the Treasury is finally prepared to cut the financial cord to the failing airline in its current guise.
Propped up by state and taxpayer-funded bailouts over the years, SAA has become the enduring image of under-performing SOE ventures. Only Eskom’s previous mismanagement can compare to the incompetency displayed at the national carrier since Jacob Zuma assumed the presidency.
SAA ‘will receive no more bailouts’ – Treasury
The airline did try and launch a revival, after being badly hit by the pandemic while complying with operational guidelines set out by the Business Rescue Practitioners. A wave of cuts and cost-reducing measures have failed to get SAA back on the straight and narrow. And, as we learned on Friday, the Treasury has had enough.
- There is “no further action” planned to bailout the beleaguered airline, as highlighted by last week’s Budget.
- The government wants creditors to back a restructuring plan, but they’ve not allocated any more money for SAA.
- Treasury told lawmakers they would not provide any new money to the airline as they were “insolvent”.
- It’s believed that the only funds SAA will get going forward is enough money to pay-off guaranteed debts [Reuters].
Will South Africa get a new airline?
On Thursday, unions indicated that this was the beginning of a tumultuous end for the airline after four major representatives signed a deal for severance packages. However, the government is still keen to establish a brand-new carrier, which has been compared to a ‘phoenix rising from the ashes’.
Although there’s been no timescale on when we could expect a new airline to get up and running, it seems that SAA’s protracted demise will come sooner rather than later. The DA’s Alf Lees has welcomed these developments:
“This clarity of thought is in complete contrast to the stance taken by the Department of Public Enterprises which continues to mislead the public that funds for the SAA Business Rescue Plan, proposed by the Business Rescue Practitioners (BRPs), have been budgeted for.”
“In view of the rational position taken by Treasury to shut down SAA, it is now clear that Minister Gordhan’s insistence that the airline be retained is nothing more than a political crusade designed to appease the ANC’s disastrous statist policies.”
Alf Lees
