SAA. Picture: BUSINESS DAY
SAA. Picture: BUSINESS DAY

The state capture commission will hear aviation industry evidence from Thursday until the end of June 2019.

Evidence leader advocate Kate Hofmeyr told the commission that the evidence would cover four areas, including the R15bn capital-raising exercise that national carrier SAA embarked on in 2015/2016, the North West department of transport’s agreement with airline SA Express to use the Pilanesberg and Mafikeng airports, jet fuel procurement by SAA and SA Express from EML Energy and other governance issues.

Hofmeyr said 16 people would be called to the witness stand to provide evidence.

The commission will hear evidence of how money allegedly illicitly flowed to two ministers, and members of the executive council, a head of department and a premier in North West.

Hofmeyr said the commission will also hear evidence on the Free State Development Corporation (FDC).

According to investigative journalist and author Pieter-Louis Myburgh’s book, Gangster State: Unravelling Ace Magashule’s Web of Capture, Magashule, the ANC secretary-general, had played a role in questionable loans granted by the FDC to companies associated with him.

“The loans were made to funeral parlours, a pharmacy and a car dealership, among other businesses, and Magashule apparently approved the transactions himself,” the book reads in part.

In May 2018, Sunday Times reported how a little-known music promoter was awarded a R2.4bn, three-year deal to supply SA Express with fuel — at R67m a month — despite the troubled airline already having a contract to receive jet fuel from SAA.

SA Express did not receive one drop of fuel for the R2.4bn deal.

On Tuesday, unions operating at the debt-ridden SAA gave the government seven days to fire the entire board of the airline and to persuade CEO Vuyani Jarana to withdraw his resignation.

SAA employees who are members of the National Union of Metalworkers SA (Numsa) and the SA Cabin Crew Association (Sacca) picketed outside the OR Tambo, King Shaka, Cape Town and East London international airports on Wednesday. They said if their demands were not met, there would be a total shutdown of the aviation industry.

The unions said they were not happy about problems in the airline’s maintenance department and allegations of nepotism and tribalism. They were also not happy about corruption allegations at SAA Technical.

Jarana officially stepped down as CEO on Monday, citing slow decision-making and red tape at the airline, as well as blurred lines of accountability and lack of funding, as reasons for his departure.

SAA GM for operations Zuks Ramasia was appointed as acting CEO on Friday.

Numsa and Sacca accused the SAA board members of presiding over massive corruption at the airline, which has an outstanding debt of R21.7bn. The airline is operating at a loss and expects to make a profit only in the 2021/2022 financial year, according to its long-term turnaround strategy.

It needs R4bn from the government to survive the current financial year and allow it to renegotiate loan terms with banks.

The airline has not made a profit since 2011 and Jarana launched a five-year turnaround plan that included slashing costs and cancelling unprofitable routes.

mkentanel@businesslive.co.za