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Boks and Bafana score free flights worth millions on board broke SAA

Cape Town – Cash-strapped South African Airways (SAA) lost out on almost R128m worth of ticket revenue in the last four years and plans to give up millions more, Finance Minister Malusi Gigaba revealed on Monday.

This follows Treasury’s announcement on Saturday that it gave the bankrupt state airline a R2.2bn bailout to help avoid a default of its loan from Standard Chartered Bank.

The loss in revenue was revealed when Gigaba provided feedback into SAA’s sponsorship deals dating back to 2013, which went to South Africa’s national sport teams, Miss South Africa and a jazz event.

The sponsorship deals gave these entities millions of rands worth of free flights, despite the airline requiring constant bailouts because it’s broke.

Until 2016, SAA’s biggest deal was a R67.5m sponsorship of the Springbok rugby team for three years, ending in December 2015. FlySafair has since partnered with the Boks, flying them around South Africa only.

However, SAA has given a far sweeter deal to the Bafana Bafana soccer team. They will receive R135m worth of free tickets between 2016 and 2021 via the South Africa Football Association.

“All SAA sponsorships are offered strictly on a value-in-kind basis,” said Gigaba in a written Parliamentary response. “This means the value of the tickets offered and there is no outlay of cash for sponsorship. The sponsored parties are liable for airport taxes.”

At the launch of FlySafair as the Springbok's new domestic travel partner in March 2017 were Damian de Allende, Elton Jantjies, Siya Kolisi, Uzair Cassiem and Ruan Combrinck (Photo: Gallo Images)

Reacting after criticism of yet another SAA bailout, Gigaba told media on Monday that the SAA bailout is fiscally neutral, with no effect on the fiscal framework.

“We have used money available in a fiscally neutral way,” he said in Soweto at the launch of the 2017 tax filing season. “It did not affect fiscal framework in any way.”

Parliament’s standing committee on finance chairperson Yunus Carrim has blamed Treasury for failing its oversight role of SAA.

“We believe that Treasury is failing in its oversight role of SAA, and we are going to be far more effective in our oversight role over Treasury and the SAA,” he said in a statement on Sunday.

“We are to meet with them in early August when Parliament reconvenes and again in September. We are especially concerned that SAA has been losing R370m a month at the moment.

“The finance committee will want to know what exactly Treasury is going to require from the SAA board in return to ensure that it functions far more effectively.”

His views echo those of committee member Democratic Alliance MP Alf Lees, who said it was a “blow to the credibility of both the SAA board and to National Treasury”.

“This emergency funding for SAA indicates the serious crisis that SAA has been mismanaged into,” he said  in a statement on Saturday. “This taxpayer bailout makes no difference to the cash crisis at SAA.”

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