DA: Gigaba must privatise SAA

Oct 08 2012 16:17

Johannesburg - Public Enterprises Minister Malusi Gigaba must consider privatising SA Airways (SAA) to prevent the airline being grounded, the DA said on Monday.

"The endemic dysfunctional nature of SAA has sapped public coffers for too long. Enough is enough," Democratic Alliance MP Natasha Michael said in a statement.

"The idea of a state-backed national carrier has flown its course and must now be grounded. Surely, privatisation is the obvious alternative."

The party's comments come in the wake of an announcement on Monday that SAA chief executive Siza Mzimela has resigned from the company.

Michael said Gigaba should meet with the DA "as a matter of urgency" to discuss privatising the airline.

"The former CEO has presided over an airline characterised by spiralling debts, operational inefficiencies, and an entrenched reliance on bailouts from the National Treasury," she said.

"These factors have finally brought the wasteful airline to its knees. The airline is now well and truly in a crisis."

She said it was "no exaggeration" that SAA could find itself grounded by the end of the year.

Gigaba's office confirmed Mzimela's resignation on Monday.

"Yes we have received the resignation. We have accepted the resignation, but it was not with immediate effect," said Gigaba's spokesman Mayihlome Tshwete.

"She will remain with us for some weeks until we find a suitable person to act in the interim."

Mzimela was appointed CEO in February 2010.

SAA spokesman Tlali Tlali could not confirm the resignation when contacted for comment.

The Business Day website BDLive reported on Monday that Mzimela had described her resignation to her staff as "not a random move".

"I have given this decision careful thought and feel that now is the best time to relinquish my position as your CEO and allow somebody else to pilot the company into the future," she was quoted as saying by the website.

Mzimela's resignation comes weeks after SAA's chairwoman Cheryl Carolus and six board members resigned.

Gigaba said he had only learnt about the mass resignation from media reports.

SAA was expected to report a R1.25bn loss for the year ended March 31, when it holds its annual general meeting next week.

Last week, the airline won support from National Treasury after hard negotiations between it and the public enterprises department to support the airline, which according to the previous board has a debt to equity ratio of -359%, the website reported.

Treasury agreed to a R5bn guarantee to enable SAA to borrow from financial markets.

* Follow Fin24 on TwitterFacebookGoogle+ and Pinterest.

saa  |  sa airways  |  malusi gigaba  |  da



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about: STEINHOFF

Steinhoff International, once the darling of fund managers, risks falling out of the JSE top 100.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

If SARB keeps interest rates the same this afternoon, how will this affect your personal finances?

Previous results · Suggest a vote