Ricochet News

Struggling SAA needs to be sold and Chair fired - DA

By Charl Bosch - Nov 30, 2015
Struggling SAA needs to be sold and Chair fired - DA

The Democratic Alliance (DA) has announced it would be submitting an application to Finance Minister Nhlanhla Nene for government to start a process of selling off beleaguered national carrier, South African Airways (SAA).

This follows a weekend CityPress article, which revealed that the airline is facing a potential loss of R4.7-billion this year, nearly double the R2.5-billion it suffered in 2014.

Extracts from the carrier’s financial statements, obtained by the paper, indicated that its costs increased to R31.6-billion this year, the biggest being maintenance (R3.4-billion), employee-benefit expenses (up by R430-million) and leasing costs (increased by R292-million).

It also revealed that the purchase of six Airbus A320’s had cost SAA nearly R1.4-billion and that losses continued mounting despite a saving of R891-million, thanks to falling oil prices.

In a statement, DA Shadow Minister of Public Enterprises Natasha Mazzone said the findings are a clear indication that controversial SAA Chairperson, Dudu Myeni, needs to be fired as the “people of South Africa [are unable] to fund [her] perpetual mismanagement”.

“At a time when service delivery is falling by the wayside, the future of the country’s students at higher learning institutions is being compromised and job opportunities decreasing year on year, the government can no longer afford to keep SAA in the air, Mazzone said.

She added that the airline’s reliance on constant government bailouts has shown no improvements thus far, and that it be would be unfair to hold the taxpayer accountable.

Myeni came under renewed fire some three weeks ago after it was reported she wanted amendments to the lease agreement with Airbus, which would have cost SAA R1.5-billion for not sticking to the terms of the contract. Days later, Chief Financial Officer Wolf Meyer announced his departure, a mere four months after the resignation of Chief Strategy Officer, Barry Parsons.

SAA spokesperson Tlali Tlali has meanwhile the described the findings as having “no official status” due to the airline having not released the financial statements itself.