CAPE TOWN - It is patently obvious that South African Airways (SAA) has become a major risk to South Africa’s sovereign ratings and the airline needs to be put into business rescue and then privatised, the Democratic Alliance said on Sunday.
The DA would call for a full disclosure on the status of funding for SAA and why parliament was possibly misled by the National Treasury, following a report in the media that SAA had again run out of cash and would receive a bailout of R5 billion - its third cash injection in just one year, DA spokesman Alf Lees said.
On May 8, National Treasury director general Dondo Mogajane informed parliament's finance standing committee that the R5 billion cash requirement that SAA CEO Vuyani Jarana had told the committee on April 24 was needed by SAA would not come out of public funds but would be sourced from either lenders or private equity, he said.
The DA had repeatedly tried to get answers from the National Treasury and SAA about the cash position at the embattled airline. These enquiries had been repeatedly dismissed on the basis that the information was sensitive and would badly affect SAA’s ability to operate in a very competitive market.
"Once the R5 billion is paid to SAA, there will have been a total of R15 billion in bailouts to SAA. On top of this, the SAA turn-around plan only envisages a break-even in 2021, after losing approximately R12 billion over the next three years.
"It is patently obvious that SAA has become a major risk to South Africa’s sovereign ratings. It is simply irresponsible for the finance minister to continue to bow to political ideological pressure to not put SAA into business rescue and then privatise it," Lees said.