President Cyril Ramaphosa says that selling SAA is not an option, although government is looking to secure a strategic equity partner.
During a parliamentary meeting on Tuesday November 6, Ramaphosa said: “If we say ‘shut down SAA’, we say that the debt that SAA carries becomes payable immediately, but immediate payment has an impact on the debt that is carried by all other state-owned enterprises. That is how you can collapse the fiscus. SAA should be seen as a collective challenge and problem.” He added that the focus should be to stabilise the airline. “One of the options is that we get a strategic equity partner, rather than shut it down”
The president’s comments come after Finance Minister Tito Mboweni told an investor conference in New York last week that the country was “unlikely to sort out the situation” and said his view was that the national carrier should be closed down. Public enterprises minister Pravin Gordhan has indicated that he does not believe the airline should be sold.
Business Day reports that the airline has been in financial distress since 2011, and has had R18bn (€1.12bn) in losses since the 2015 fiscal year. In the past two years it received R10bn (€624.2m) in bailouts and is still dependant on a R19bn (€1.19bn) state guarantee to keep afloat. The carrier is seeking a further R22bn (€1.37bn) in government bailouts to sustain operations over the next three years.