DA: SAA must go into business rescue

SAA planes are seen parked at OR Tambo International Airport in Johannesburg. File picture: Waldo Swiegers, Bloomberg

SAA planes are seen parked at OR Tambo International Airport in Johannesburg. File picture: Waldo Swiegers, Bloomberg

Published Jul 27, 2016

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Johannesburg - Although finance minister Pravin Gordhan’s decision to finally reconstitute SAA’s board has been welcomed, the DA is arguing the business should be put into business rescue.

Alf Lees, the DA’s shadow deputy minister if finance, says Gordhan must place SAA under Business Rescue - a way indebted companies can work their way away from a potential liquidation - and fire the entire board immediately.

Finance minister Pravin Gordhan said on Monday that National Treasury was working on finding a new board for the embattled national airline, SAA. While the new board could include “new blood” and existing members, the airline needed experienced people to steer it out of its current problems, he said.

Lees notes SAA has been plagued with major financial problems, including assessed losses of R18 billion and a recent debacle around its R256 million appointment of BnP Capital as financiers, which was followed by the deal being cancelled after it was revealed to be unorthodox. This resulted in an alleged cost to SAA of R49.9 million.

“The DA therefore reiterates the urgency for SAA to be placed under business rescue given the financial disarray into which SAA has sunk. “

Read also:  Treasury aims to appoint new SAA board

Gordhan said the right mix of people at the parastatal would steer it in the right direction. “We must do political homework to get credible people on board.”

The minister added the new board could include newcomers, as well as existing members but stressed that the group should have the right skills for the job. He said Treasury would look into SAA and it would find a way to put it on a sustainable financial path.

Meanwhile, civil society organisation OUTA says Gordhan need not look too far to find the talent needed to get SAA back on track. The organisation, which started out opposing etolls and now fights what it perceives as general injustice, said the airline could simply tap into the talent it has lost recently.

Read also:  SAA ‘scrapped BnP deal on its own’

“Over the past few years, SAA has lost a lot of fine talent with considerable airline management experience and it would be wise for minister Gordhan to bring these very same, relatively young and energised people back to fix the mess and damage created by the current board.”

Citing several people who have either been suspended or left, the organisation says Gordhan should call on these people for their insights and suggestions for SAA’s success and turn-around strategy.

“Airlines require people with credible management experience from within the industry, to be successful and compete with other airlines. Management experience from within the industry enables efficient structure and the ability to negotiate and manage necessary route sharing partnerships, maintenance contracts and the like. These are the people who have what the minister and the nation requires, along with the energy and passion to make SAA the successful airline it has every potential to be,” says Wayne Duvenage, OUTA’s Chairperson.

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