Mango Airlines Photo: file
Mango Airlines Photo: file
Last week, the Organisation Undoing Tax Abuse (Outa) announced that it intends to file a submission to halt the ongoing state bailouts of South African Airways’ (SAA ) subsidiaries: Mango, SAA Technical and Air Chefs.
Outa CEO Wayne Duvenhage spoke to Travel News about the issue of continued bailouts for state-owned entities and called for tourism businesses not to support the state-owned airlines which are dependent on taxpayer funding through boycotting ticket sales of flailing state-owned airlines and putting a stop to the ongoing state bailouts.
Duvenage appealed to the country’s tourism sector to put its weight behind Outa’s call to end the continued state funding of SAA subsidiaries. Duvenage called for travel agents to stand together and boycott state-owned airlines over this matter.
“The airlines and the travel industry hold more strength than they know. The quickest way to bring an end to these government practices would be for the industry to boycott their support of these airlines,” Duvenage told Travel News.
Outa says the South African government should not be exclusively bailing out corrupt and inefficient state-owned airlines, which were in trouble long before the onset of the global pandemic.
“They are creating an unfair playing field that is highly uncompetitive and that does not bring the inefficiencies of these entities into check,” Duvenage said.
Duvenage states that it is unfair for government to continue ploughing tax-payers’ money into the beleaguered state-owned airlines through continued bailouts while the country’s privately owned airlines were left to battle it out without any support.
“Outa calls on the State to stop wasting its limited resources in the bailout of non-core state-owned enterprises. The country has much bigger issues to deal with, such as the fight against corruption.
“It is extremely frustrating for society to hear that budgets and funding for such important institutions as the National Prosecuting Authority and the Special Investigations Unit are being reduced, whilst failed non-essential SOEs are being allocated billions of rand to prop them up. This is simply not acceptable.”
Outa’s submission to halt the bailout of the state-owned SAA subsidiaries is based on its view that the government is contravening the Companies Act.
Outa says that the government is attempting to appropriate funds from SAA’s business rescue to resuscitate the national carrier’s subsidiaries, whose recapitalisation was never included in SAA’s business rescue plan.
“Government is breaking the promises that it made to support SAA’s approved business rescue plan and is flagrantly abusing taxpayers’ money through this appropriation of SAA funds. It also leaves SAA creditors, such as agents and their clients, in the lurch, as much of the remaining SAA business rescue funds were to be allocated to the reimbursement of SAA’s unflown ticket-holders,” Duvenage said.