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SAA an 'embassy with wings that should not fail'

Oct 23 2017 05:00
Carin Smith

Cape Town - It is time that South Africans realise the sale or collapse of the country's flag carrier South African Airways (SAA) must not be an option, according to Tabassum Qadir, former co-chair of grounded low cost airline Skywise.

"Conventional wisdom might suggest that states have no business running airlines and consultants might argue that most economies sell their flag carriers to other airline groups. But there is considerably more at stake that just ensuring that each flight boasts an 80% load factor," she said.

"A national carrier is an embassy with wings, transporting culture, cuisine, commerce and goodwill around the world. South Africans need to recognise the importance of their flag fluttering on as many routes as possible instead of tightening their belts on the government."

SAA chair

Earlier this week Finance Minister Malusi Gigaba replaced Dudu Myeni as SAA chair with JB Magwaza, currently chair of Imbewu Capital Partners and Delta Property Fund. The beginning of November will see new SAA CEO Vuyani Jarana will be joining the bankrupt airline next month.

Gigaba has been trying to find a way to recapitalise SAA and more on this might become clear from his mini budget speech this week.

In an SAA briefing in August, Parliament was told SAA is expected to make losses of R2.8bn in 2017/18 and possibly make a profit in 2019/20.

At the end of June 30 Treasury bailed out SAA to the value of R2.2bn to pay back Standard Chartered, which declined to renew its loan facility. At the end of September another R3bn was approved so that SAA could pay back US lender Citibank.

The departure of Myeni was seen as "a welcome relief" by the national carrier's pilots. They expressed the hope that "the dark days of board members like Ms Myeni - allegedly acting in their own interests and not fulfilling their fiduciary duties - are over".

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