SAA emergency meeting must continue with or without Finance Minister’s attendance

31 August 2016

The Standing Committee on Finance has responded to the DA’s request for an emergency meeting with SAA Chairperson, SAA CEO, Finance Minister, Deputy Finance Minister and the Director-General of Finance on the 06 September 2016by deciding that it is not logistically possible due to the Minister of Finance being out of the country until the 05 September 2016 and will only be able to respond about a date once he is back. 

Given the danger of the liquidation of SAA, there is no other option available for Parliament but for the emergency meeting to go ahead without the Minister of Finance.

My initial request was for the emergency meeting to be held today, there was then a suggestion of the 02 September as an alternative, however on this date the Finance Minister will be out the country. 

06 September was then proposed despite this falling squarely on the deadline when SAA is reportedly going to lose its landing rights on the lucrative Hong Kong route, which is a significant revenue earner for the desperate parastatal. We are now in a situation where the earnings from the Hong Kong route may be kissed goodbye as SAA will not be presenting their financials before the Hong Kong deadline.

Of much concern is that SAA still sits with a whopping R16 billion in loans. Much of which it cannot afford to repay, as is the case with the Standard Bank R250 million loan. On top of this SAA is also failing to pay Nationwide Airlines the R104.6 million which was ordered by a court judgement due to SAA’s uncompetitive behavior.  

Reports indicate that the only buffer between SAA and liquidation is the R99 million left from the R15 billion in issued government guarantees. Unfortunately the scope for SAA to return to being a profitable state entity is seeming less likely by the day. 

If no immediate action is presented in an emergency meeting on 06 Septemberit could turn out to be a sad day for the thousands of South Africans employed at SAA, SAA Express and Mango Airlines who may soon be jobless. 

The DA's view that SAA must be placed under business rescue has been reinforced by the rumors that the acting CEO, Mr Zwane, has requested that he be relieved from the CEO position and returned to his technical job.

Issued by Alf Lees, DA Deputy Shadow Minister of Finance, 31 August 2016