The Democratic Alliance on Friday renewed its call for South African Airways (SAA) to be privatised.
”Transnet has provided the Public Investment Corporation [PIC] with a very sweet deal by issuing a secret corporate bond this week,” DA public enterprises spokesperson Ian Davidson said in a statement.
This is effectively to provide the second bail-out of SAA this year. Transnet CEO Maria Ramos or Minister of Public Enterprises Alec Erwin should explain why this was done in secret and why the bond was not offered to the market, he said.
”Was it out of fear that the bond issue would fare poorly on the open market?”
The bond issue, which had relatively favourable terms, was only offered to the PIC — the major custodian of government pensions.
Ordinary South Africans should not have to pour money into an ailing parastatal when international examples of successful private airlines, such as WestJet, Virgin Atlantic and Southwestern, abound.
There have also been many examples of the successful privatisation of national carriers. In 1997, Lufthansa was fully privatised and is now one of the world’s most profitable airlines.
Air Botswana and Air Nigeria have since announced solid plans to emulate this model. It is important that Erwin announce similar plans to save South African taxpayers from further bail-outs of a loss-making airline, Davidson said.
All South Africans stand to benefit from the privatisation of SAA, which will create more competition, lower fares, better service, and no more taxpayer bail-outs of old, irrelevant airlines that should be allowed to expire quietly and disappear.
A government-controlled national carrier is not justified, because it is only perpetuating SAA’s monopoly, which is severely inhibiting the growth of both tourism and business travel.
”The key to success in air transport is healthy private-sector competition with the state being involved in regulating, supporting and managing aspects such as safety and security, licensing, noise control and the environment,” Davidson argued. — Sapa