SAA, SA Express merger ready for lift-off

Government’s intention to sell equity in its ailing state airlines took another step forward with the announcement that SAA would move from its shareholder, the national treasury, to the public enterprises’ stable.

The airline, which confirmed its sixth straight loss and received R15-billion in government bailouts in the financial year ending in 2017, will now report to public enterprises minister Pravin Gordhan following government’s gazette today.

After the announcement, Gordhan said his department was now well placed to “consider strategic alignment and synergies between SAA and SA Express.”

READ MORE: Siza Mzimela appointed acting CEO of struggling SA Express

“I have had a joint meeting with the chairs and deputy chairs of both airlines and we will now start the process of formalising a joint board committee to give effect to this strategic alignment and operational consolidation.”

This move — together  with the with pace at which the department of public enterprises is intent on merging the two loss-making entities — is a signal of Gordhan’s previous intention that government’s sale of a stake in its aviation assets include SA Express as well.


Operationally this would mean SAA, SA Express, and Mango would all fall under one group management structure and pool resources as well as assets, including aircraft.

While SAA’s financial issues are well-known, SA Express — which has just come out of a forced grounding by the South African Civil Aviation Authority (SACAA) following serious safety concerns — has had its own financial problems and is yet to table its 2017 financials.

The department  also announced that former SAA CEO Siza Mzimela — who has been part of an intervention team deployed by Gordhan recently — would take over as interim chief executive at SA Express following the departure of Matsietsi Mokholo, who will move to the Presidency.

The statement released by treasury this afternoon said the transfer followed a study commissioned by the finance and public enterprises departments to develop an optimal group structure for the state’s aviation assets.

“As executive authority for other major state owned companies, including SA Express, the Minister of Public Enterprises is best placed to be the custodian of all the state’s aviation assets. These assets are South African Airways (SAA), and its subsidiary, Mango, and SA Express.”

The move was welcomed by Democratic Alliance MP and member of the standing committee on finance Alf Lees, who said: “Changing the department that is responsible for SAA will not make the airline profitable. SAA will still require taxpayer bailouts of R5.45-billion in 2018, R5.18-billion in 2019, and R1.93-billion in 2020 to fund the ongoing SAA losses and that the turn-around strategy includes.”

“It may well be that the sensible thing to do would be to liquidate thee other linked entities and cut the losses that the South African taxpayer has to continually fund.”

Lees challenged government to make public its study to develop the optimal group structure for state-owned aviation assets.

Subscribe to the M&G for R2 a month

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

And for this weekend only, you can become a subscriber by paying just R2 a month for your first three months.

Sabelo Skiti

Sabelo Skiti is an investigative journalist.

Related stories

Workers get their slice of SA Express

Proposals for how to carve up ownership of the airline could mean that the government will no longer hog the whole pie

SA Express employees in R250m crowdfunding bid to buy their airline

Amid the overnight, worldwide crash of the air travel industry, a group of retrenched SA Express employees have an ambitious plan to raise R250-million in seed funding to buy the cash-strapped airline.

Clicks-bait: EFF MP’s new parole probe

Kenny Motsamai, a parolee who is also an EFF MP, could be sent back to jail if correctional services finds he violated his parole conditions

EFF MPs to be investigated for disrupting parliamentary proceedings

Under the spotlight will be the Economic Freedom Fighters’ behaviour at the State of the Nation address and during the public enterprise department’s budget speech

Gupta-linked Bobat was hired on merit, Van Rooyen tells Zondo commission

Former finance minister Des van Rooyan said he did not have Mohamed Bobat’s CV when he appointed him as a special adviser

SAA 2.0 hopes to start lean and grow from next year

Draft agreement document spells out that R1.5-billion will be needed to fund severance packages for 2 400 of the airline’s employees
Advertising

Subscribers only

ANC: ‘We’re operating under conditions of anarchy’

In its latest policy documents, the ANC is self-critical and wants ‘consequence management’, yet it’s letting its members off the hook again

Q&A Sessions: ‘I think I was born way before my...

The chief executive of the Estate Agency Affairs Board and the deputy chair of the SABC board, shares her take on retrenchments at the public broadcaster and reveals why she hates horror movies

More top stories

Between dark and light was Maradona

The life of Diego Armando Maradona, who died this week, will always remind us that the smell of shit is as important as the perfume of flowers, writes Niren Tolsi

Public protector’s ‘mistakes’ were made to nail the president, court...

Busisiwe Mkhwebane discarded facts that were inconvenient to her when she investigated the CR17 campaign, Cyril Ramaphosa’s lawyers argued

Student funding scheme gets new chief executive and board

The National Student Financial Aid Scheme has been under administration for two years after its board was dissolved and its boss resigned not even halfway through his term

General Council of the Bar slams Zuma Foundation

Another summons has been served on Jacob Zuma at his Nkandla residence, requiring the former president to appear before the Zondo Commission next year
Advertising

press releases

Loading latest Press Releases…