South African Airways should be kept as national airline, ANC says

The airline will, however, need ‘substantial restructuring’, ANC official says.
SAA is running out of cash after the government failed to provide R2bn of emergency funding. Image: Shutterstock

Heavily-indebted South African Airways (SAA) should be retained as a national airline but needs substantial restructuring, a top official in the governing African National Congress (ANC) party said on Wednesday.

SAA is running out of cash after the government failed to provide R2 billion of emergency funding it promised when the airline entered a form of bankruptcy protection last month.

Government officials say they still want to give SAA the promised funds, but Finance Minister Tito Mboweni is insisting the transfer be done in a way that avoids increasing the country’s budget deficit.

Time is running out for potential options that include the sale of state assets.

“SAA should be retained as a national airline, which will require substantial restructuring. The Cabinet should take the operational decisions needed to achieve this,” ANC Secretary General Ace Magashule told reporters.

Magashule, one of the ANC’s top six officials, was among those who attended a four-day meeting of ANC leaders to debate the economy and struggling state firms that ended on Monday.

SAA is among several South African state entities, including power company Eskom, that are mired in financial crisis after nearly a decade of mismanagement.

State companies’ financial problems are seen as one of the biggest threats to Africa’s most industrialised economy and have helped to push the country’s credit rating to the brink of junk status.

On Tuesday, SAA said it had cancelled more than 20 domestic flights between its Johannesburg hub and Cape Town and Durban this week, and 10 international flights to and from Munich, to save dwindling cash reserves.

‘Working feverishly’ 

The airline has not made a profit since 2011 and has received more than R20 billion in bailouts over the last three years.

Last year the government’s patience ran out.

Public Enterprises Minister Pravin Gordhan allowed SAA to enter “business rescue,” a bankruptcy protection process that shields the airline from creditors’ demands while an independent adviser takes over.

Since then, SAA has burned through R2 billion of funds from lenders.

Finance Minister Mboweni told state broadcaster SABC in an interview at the World Economic Forum in Davos that officials from his ministry were “working feverishly” to secure the extra R2 billion SAA urgently needs.

“It’s very important that happens in a fiscally-neutral way because we don’t have an appropriations bill that can find an additional R2 billion,” he said. “We will try to support SAA as much as we can.” 

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Says one of the biggest imbeciles the ANC has ever managed to “Deploy”.

No wonder.

I concur with this comment, is sums the whole matter up very nicely.

Utterly clueless! Can see why the country is in a mess.

…rephrase:

‘We, the ANC, emphasise at this point that SAA should be retained as a vessel for looting.’

The ANC can retain the memory of SAA, a once respected airline they helped destroy.

Your ANC can take 100 resolutions. Just find the money first to keep the lights otherwise your resolutions ain’t worth the paper they are written on.

D0 not be so hard on him, he is off to jail this year.

Of course Ace would say that. His legacy of destroying the Free State will be seen for generations to come

It’s his group of thugs who want to undermine security and growth in SA.

They are dead set against restructuring over employed SOE’s. As Communists, without SOE’s, they cannot live like Capitalists

The demise of a once beautiful country caused by the ruthless carnage of a few

Ace Magashule is one of the most sinister, scheming, evil and greedy humans this country has ever produced and boy, we’ve produced some doozies! Perfect to be SG of the ANC

Wow, Magashule- “Take the operational decisions needed to achieve this” (secure the national airline). And exactly what operational decisions have impacted the situation since 2011 big guy?

Guess only government aficionados trolling for free tickets and excess Airmiles will miss the carrier- nobody else dares fly on it knowing the state of the management and finances.

Cutting corners in air travel is about as popular as taking the long scenic route was to the captain of Titanic.

Throwing good money after bad- goes against investment science 101. Shows the depths of dumbness he thinks the SA taxpayer really is…Aces, at the price we have already paid hope there are enough lifeboats onboard.

End of comments.

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