South Africans derive very little benefit from SAA, says DA
Johannesburg - The DA has called on Finance Minister Tito Mboweni to live up to the government’s promise not to bail out cash-strapped SAA after it agreed to increase the wages of striking workers last week.
DA spokesperson on public enterprises Ghaleb Cachalia slammed the airline for the agreement, saying the Treasury should not fund it.
“The leadership structures of SAA know they cannot and will not be able to fulfil these wage promises and the DA fears that the taxpayer will once again be forced to pay the price in the form of a bailout,” Cachalia said.
SAA announced last week it had reached an agreement with workers for a 5.9% wage increase.
According to SAA, the strike cost the airline around R50million because the industrial action saw many flights being grounded.
In his recent medium-term budget policy statement, Mboweni warned that the airline would not be able to generate enough operational cash flow if it was not reconfigured.
Unions have, however, blamed SAA’s poor financial position on mismanagement and looting by its leadership.
The national airline and the unions also agreed that the money would be paid in 2020, subject to the availability of the funding.
Cachalia said SAA was reckless in reaching the settlement, which would cost R72million annually.
“To make matters worse SAA has promised employees a wage increase effective from February 2020, with backdated payments to April 2019 - subject to the availability of funds.
"It is almost comical, if it were not quite so tragic, that an insolvent public enterprise would even consider honouring such an onerous financial commitment,” he said.
He said the DA wanted SAA to be placed under business rescue or be partially or fully privatised by the government.
“South Africans derive very little benefit from SAA, which is clearly in desperate need of drastic measures.
"It is time for the national government to start making tough decisions with regard to the future of SAA,” Cachalia said.
Public Enterprises Minister Pravin Gordhan recently indicated that the government had provided fiscal support of more than R20.5billion in the last three years and that no more financial resources would be advanced to the carrier.
Gordhan stressed that SAA had to restructure its business to return it to profitability.