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Cape Town - The department of public enterprises (DPE) said that although the financial position of South African Airways (SAA) remains "very fragile", it has to and can trade itself out of trouble.
Dismissing calls from MPs for government to give the national carrier another cash injection, outgoing DPE director general Portia Molefe said on Wednesday it would "not be appropriate to approach treasury for help" because the airline was quite capable of funding itself.
This followed the airline's posting of a R398m net profit in its previous financial year, compared to the R1.1bn loss it posted the year before.
MPs were concerned, however, that the airline would have reported a net loss of R10m had it not been for the reversal of R408m in impairment costs relating to a 2004 Airbus deal.
They argued that treasury should settle the Airbus problem for SAA so that South Africans could fly knowing that their country owned its planes and did not "just rent them".
However, Molefe emphasised that the airline "should be able" to pay off its own debts, although the economic climate complicated SAA's turnaround programme.
Meanwhile, she said that as soon as SAA has its balance sheet in order the state should consider merging SAA and SA Express. She said this was an option government had already considered but, given SAA's financial problems, it was not a good idea to "contaminate" the SA Express balance sheet.
- Fin24.com