Minister wasting “fresh money” on SAA - DA

BY CHARL BOSCH - JANUARY 22, 2015

The Democratic Alliance (DA) has criticised Finance Minister Nhlanhla Nene’s decision to provide troubled national airliner, South African Airways (SAA), with a guaranteed R6.48-billion in government funds, describing it “as a waste of fresh money”.

“SAA is currently in the midst of a 90 day turnaround strategy. It is irrational to redirect billions more in funding to SAA before the results of this turnaround strategy have been accounted for,” the party’s Shadow Minister for Public Enterprises, Natasha Michael, said in a statement.

She stated that it was “common knowledge that SAA is not a going concern” and that the carrier, “instead of constantly running to Treasury with its begging bowl in hand,” should focus on the containment of current and untenable cash, amending deficiencies in its capital structure, and consolidating existing essential flight routes as well as eliminating those viewed as unprofitable.

Michael also added that the carrier must reach a stage where it could operate from its own balance sheet and funds, before accusing the department that the latest bailout, on top of the R5-billion awarded in 2012, “will do nothing solve the institutional problems facing SAA”.

“Treasury can no longer afford to be used as a safety net. Until the core issues surrounding SAA’s rapid decline are confronted head on, this cycle of endless bailouts and guarantees will continue,” she said.

 

CAPTION: Finance Minister Nhlanhla Nene. IMAGE sourced from economie.jeuneafrique.com

 

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