African National Congress (ANC) Chairperson, Gwede Mantashe says if the South African Airways (SAA) cannot sustain itself it must be sold to a willing buyer. Earlier this week, the airline announced its decision to cancel most domestic, as well as some international, routes in an effort to make it financially sustainable.
SAA was placed under voluntary business rescue in December 2019. It has received more than R20 billion in bailouts over the last three years.
Speaking at the party’s 108th anniversary celebrations in Komga in the Eastern Cape, Mantashe said the government could not continue to bailout an entity that was failing to make money.
“We can’t throw a billion at one entity every month – R2 billion rands in December; R3.5 billion from DBSA this month and still it does not have money. There is something wrong. Let’s deal with the issue that is wrong, and not throw money at the problem because throwing the money at the problem does not improve the quality of service. In any way, I was making a very important point that airlines do not transport working class and the poor. They transport the middle class and high class. So, to throw money in subsidizing the high class and the middle class is bordering on being reckless,” says Mantashe.
Meanwhile, government is planning to make representation to the SAA Business Rescue Practitioners to review the airline’s recent announcement that it will be cancelling most of its domestic as well as some international routes.
On Friday, President Cyril Ramaphosa said government did not agree with the decision.
The State-owned airline was placed under voluntary business rescue in December 2019.
The airline, which is fighting for its survival, has not made any profit since 2011. It has received more than R20 billion in bailouts over the last three years.
Richard Mantu from the Public Enterprises Department says they want the route changes reviewed.
“So, government, as it is now, will be making representations to the Business Rescue Practitioners in order to balance the necessity for trimming the unprofitable routes with the need to ensure that there is balance for both the airline and the South African Aviation Industry. While understanding the impact of the process, which is obviously resulting in the restructuring of routes staff and costs, both government and the Business Rescue Practitioners are both committed to a viable SAA at the outcome of this process.”
