Government admits South Africa Airways is beyond ‘repair’

25 April 2018

The ANC has allowed SAA to be so badly managed and with considerable malfeasance apparent that SAA is now in debt in the amount of R9,2 billion. It is acknowledged that there is no possibility that SAA will ever be able to trade its way out of debt.

The Deputy Minister of Finance, Mondli Gungubele, told parliament today that, over and above the R10,0 billion already paid to SAA in 2018 as well as the existing R 9,2 billion currently owed to lenders, SAA would require an additional R 12,0 billion being:

- R 5,0 billion in 2018/19

- R 5,0 billion in 2019/20

- R 2,0 billion in 2020/21

This equates to a total of R 31,0 billion in taxpayer bailouts for SAA just to fund losses without any purchases of new aircraft.

The DM informed the SCOA that the calculated cost of liquidating SAA would amount to a massive R60 billion.

The choice facing the SA taxpayer is to pay another R21,0 billion and take the risk that SAA will be profitable by 2021 and will remain profitable thereafter or to cut the losses and pay R 60 billion to shut SAA down immediately.

The ANC government has prioritised funding wealthy people to fly SAA in place of using this money to fund service delivery that could be funded by the R 31,0 billion wasted such as:

- free higher education

- 775 New schools

- 238 461 RDP houses

- 172 222 Additional policemen

The DA will formally request that the Minister of Finance to explain why SAA should not be put under business rescue.

Issued by Alf Lees, DA Shadow Deputy Minister of Finance, 25 April 2018