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SAA subsidiaries to receive funding

Following the tabling of Special Appropriation Bill.
SAA Technical employees have received between 25% and 50% of their salaries every month for the past year, with no clarity on what they will be paid in May and June. Image: Supplied

Subsidiaries of South African Airways (SAA) are to get around R2.7 billion from the R10.5 billion allocated to the airline to implement its business rescue plan.

SAA Technical (SAAT) will receive R1.663 billion, Mango Airlines R819 million, and Air Chefs R218 million.

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This follows the tabling of a Special Appropriation Bill by the Minister of Finance on Tuesday.

“Despite the effective date of this Act, the appropriation for the subsidiaries … must be regarded as an appropriation and expenditure for the 2020/21 financial year,” states the bill.

The Chief Director of state-owned enterprises at National Treasury, Ravesh Rajlal, told parliament’s standing committee on appropriations on Tuesday that at the time of the funding allocation for SAA, the Department of Public Enterprises (DPE) informed the treasury that the allocations made to SAA subsidiaries in the business rescue plan may change due to the expected restructuring of the airline when the interim board takes over.

“If more funding beyond the R819 million is required for Mango then that amount will have to be looked into from the existing R2.7 billion,” he said.

Rajlal told the committee that SAA has received close to R50 billion since 2008 from the government in the form of guarantees.

“It’s hard to see the value of the amounts given to SAA. This is why we [National Treasury] have issued the instruction note on government guarantees to make a bit more stricter in terms of how government guarantees are actually applied for and awarded,” he said.

While SAA had been under business rescue since December 2019, its subsidiaries Mango, SAAT and Air Chefs have not. The SAA business rescue practitioners were therefore not legally mandated to spend any of the post-commencement finance to assist the subsidiaries.


SAA exited business rescue at the end of April with the rescue practitioners saying the airline is now “solvent and liquid”.

The lack of funding for the SAA subsidiaries and the adverse impact that the Covid-19 pandemic has had on the aviation industry has left the three companies scrambling for cash.

The cash crunch saw Mango abruptly suspending its flights in April following its failure to settle payments relating to passenger service charges and landing and parking fees with the Airports Company of South Africa (Acsa). The flights however resumed following funding discussions with the DPE, the SAA and Mango boards, and the airport management company.

SAAT and Air Chefs were unable to pay full salaries to their staff during the hard lockdown in 2020. SAAT staff have only received between 25% and 50% of their salaries every month for the last year.

The National Union of Metal Workers of South Africa (Numsa), the South African Cabin Crew Association (Sacca) and Solidarity had previously told Moneyweb that there is still no clarity on the payment of salaries at SAAT for May and June.

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SAA is ‘solvent and liquid’? It as miracle! Perhaps SAA should be renamed to ‘Lazarus Airways’?

Well, Lazarus did get up, this albatross will never fly, except of course if Pravin “finds ” another R x billion to inject into this corpse.

I’m sure the destitute starving homeless amongst us will be delighted at their government’s use of revenue in this instance. Viva.

Good thing they are stupid so they will keep voting ANC

You must be a very special kind of stupid to fly with this crowd !!

((Mboweni reportedly tweeted: “I recall the days when this airport was populated by the Zambia Airways fleet. There is none now. Zambia Airways does not exist anymore. Reality check. But I am on Rwanda Air. A small African country doing big things.”)) circa July 2019.

Remember this tweet Hon Mboweni?

If small countries (cow-ntries) are doing big things what is the most advanced country (cow-ntry) doing?

Is this why SAA is always being bailed out so that we don’t end up like Zambia for national pride?

When last did we do a reality check on SAA?

How can it be solvent and liquid? They haven’t flown for a year so there is no income. They have ongoing costs in maintaining and paying for a fleet of aircraft not to mention salaries and so on and on.You weon’t see me step onboard an SAA hull – disgruntlerd staff = questionable maintenance.

“disgruntlerd staff = questionable maintenance.” – food for thought.

They are solvent courtesy of the overtaxed citizens of this country. Solvency merely means that their assets exceed their liabilities. That probably won’t last long before the next taxpayer bailout to pay for ongoing costs which will push them into insolvency again.

I’m relieved for the sake of those working for SAA Technical. Many of them have been working full hours for only 25% of their salaries for months now.

And this goes on and on.
They must seriously believe that you can take a kentucky fried chicken to a Vet and bring it back to life again.

The ANC is “bribing the sheriff” to prevent him from attaching all the assets of the state in the current reality where all SOEs are hopelessly bankrupt. They have to keep on throwing money into this bottomless pit to prevent the triggering of cross-defaults that automatically result from the default of one SOE. If they allow one SOE to default on its debt, then all the SOEs will default at the same time. They are kicking the can down the road.

There is no leadership in Luthuli House. The factions are fighting to protect their opportunities to loot the assets of the nation. Some connected cadres plunder the taxpayer through state capture, while others plunder the taxpayer through BEE laws and the Mining Charter. They don’t have time to save the SOEs because they are too busy saving Luthuli House.

The clowns in Luthuli House still believe the fallacy that “the means of production” in the form of SOEs belong to the state, while in reality, all the assets under the control of the state already belong to the lenders. The lenders, who are capitalists per definition, will soon claim the “means of production” from the bankrupt communist looters.

Surprised Sensei that you dont get tired of Copy and Pasting the same Thing over and over , albeit the sad truth .

Are these airlines purporting to be “businesses” or are they actually “charities”?

Mr Rajlal from Treasury has at last tightened the requirements for awarding government guarantees to SOE’s. Congratulations, but too little too late – R50 billion and 13 years too late. That R50 billion could have provided:
1. R350 monthly allowances to almost 3 million unemployed youths for 4 years while NESFAS paid their studies (once NESFAS figures out what it’s function is), or,
2. Thousands of real bursaries to really deserving students,
3. 1 million basic homes at R50k each – with full title to the occupants, or,
4. 1 million flush toilets, solar panels and laptops to needy schools, and communities or,
5. 200 million wholesome meals costing R25 each to needy kids.
The list of benefits the R50 billion would have brought to the poverty stricken voters who loyally voted the anc clowns into power at each election is endless. I’m wondering whether Black Lives matter to the political elite in this country or are the vanity projects more important?

End of comments.





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