South African Finance Minister Pravin Gordhan said a decision by former incumbent Nhlanhla Nene to reject an application from the country’s state-owned airline to renegotiate a plane-leasing deal with Airbus Group still stands.
Gordhan plans to talk to South African Airways chairwoman Dudu Myeni by phone “in the next 24 hours” about the accord with the French manufacturer, which Myeni had sought to renegotiate, the newly appointed minister told reporters on Monday in Pretoria, the capital. Nene ordered SAA to implement a previously approved Airbus transaction on December 3, five days before he was fired by President Jacob Zuma.
“The previous minister’s decisions stand until there is a necessity to change them,” Gordhan said. “SAA is an important flagship for our country, its a vital national asset that we need to protect.”
SAA, which is unprofitable and surviving off government-backed loans, renegotiated an order for 10 A320 aircraft earlier this year in favour of leasing five more modern A330 models. That would have reduced operating costs and released the airline from pre-delivery payment obligations to Airbus.
While Nene approved the swap in September, Myeni, a close associate of Zuma’s, last month outlined an alternative plan under which SAA would buy the A330 planes and enter into a rand-denominated sale and lease-back transaction with a local leasing company.
©2015 Bloomberg News