JOHANNESBURG – Finance Minister Tito Mboweni on Wednesday all but washed his hands off struggling state-owned airline SAA, saying that the government was now betting on private equity partners to help turn its financial and operational problems around.
Mboweni said the national carrier incurred more than R28 billion in cumulative losses over the past 13 years, leaving it insolvent.
He said SAA was unlikely to ever generate sufficient cash flow to sustain its operations in its current configuration.
“We have essentially chosen to subsidise the middle class and wealthy flying around the country and other parts of the world, rather than the ordinary workers who sit in old trains from the townships every day, often getting stuck and being late for work,” Mboweni said. “We are also subsidising the wealthy bond holders, who hold government-guaranteed debt but receive higher yields without additional risk.”
Mboweni insisted that operational and governance interventions were urgently required to ease the pressure on the fiscus.