SAA's R1.16 billion fine - Myeni must go
15 February 2017
South African Airways (SAA) are once again in deep financial trouble after the South Gauteng High Court today ruled in favour of Comair and ordered SAA to pay a R1.16 billion fine for anti-competitive behaviour.
The R1.16 billion that SAA has been ordered to pay is R1.16 billion that could have been spent on skills development for the youth from the lost generation, who do not have the skills to enter the job market.
This recent ruling simply reinforces the long held view by the DA that Dudu Myeni is not fit to be the Chairperson of SAA or any other board, and that her reappointment as the SAA Chair was completely irrational.
The Companies and Intellectual Property Commission CIPC have already ruled that Myeni had failed to comply with the Companies Act.
The Minister of Finance can no longer procrastinate, it is now time that he remove Myeni from the board of SAA. Minister Gordhan must now also announce that SAA will be privatised.
This R 1.16 billion financial blow to SAA means makes it highly unlikely that the current state guarantees will be enough to enable SAA to both pay the massive award to Comair and to keep the airline afloat and the airplanes in the sky.
This award will also add to the consolidated contingent liabilities of the State that the international ratings agencies are keeping firmly in their sights, as they monitor the progress of fiscal consolidation that is a key factor for South Africa to avoid a full downgrade to junk status.
The DA will ensure that this R 1.16 million blow to SAA is fully interrogated at the scheduled meeting of the Standing Committee on Finance on the 29th of March 2017.
We will insist that interim financial statements for the 2016/17 year, at very least to the 28th of February 2017, are tabled at the committee meeting on the 29th of March 2017.
Everything possible must be done to avoid the consequent jobs bloodbath that would be a part of a likely recession that a downgrade to below investment grade would trigger.
Statement issued by Alf Lees, DA Shadow Deputy Minister of Finance, 15 February 2017
