His bold statement shocked many. Why? Cosatu, South Africa's largest federation of trade unions, is complaining about the state of mind of the new minister of finance regarding SAA.
The airline is a perfect storm, it has no solution. Even partnerships with global airlines such as Swiss Air, Etihad, Emirates, among others, didn’t gain traction. Why is SAA a perfect storm? If the unions take an unyielding position that nothing should happen to SAA except pouring more money into it, then Mboweni is aware that such a position is going to take us straight into financial ruin and tip us beyond the 60percent debt to GDP threshold. That makes South Africa a basket case and the IMF will simply take us over.
A perfect storm is when all the wrong elements converge at the same place at the same time for a perfect collusion. Who could have imagined that the problems of the Tripartite Alliance will manifest themselves in the sustainability of SAA in the same way as Cosatu’s comments against Mboweni’s comments are playing themselves out in the public domain. Add to that the failure to resolve the carbon tax regulation in favour of SAA, the absorption of forex losses by the Treasury, the unionisation of the airline and the failure of implementing all the rescue plans that have been tabled.
Sadly, when SAA pays carbon tax as demanded by European regulators, South Africa is unable to recover such tax revenue from European airlines on behalf of SAA. Every five minutes a plane lands at OR Tambo International; an overwhelming majority of the airlines are European.