Picture: SAA
Picture: SAA

The SA Transport and Allied Workers Union (Satawu) on Friday hit out at finance minister Tito Mboweni for suggesting that the embattled state-owned airline SAA should be closed down.

Speaking at an event with investors in New York on Thursday, Mboweni said he believed the loss-making national flag carrier should be closed down.

“[It] is loss-making, it’s unlikely to sort out the situation, in my view we should close it down… It is unlikely that you are going to find any private-sector equity partner who will come join this asset,” Mboweni said.

SAA has recorded losses for about a decade and has run up a massive debt. It needs recapitalisation of close to R22bn over the next three years to turn it around. In the 2017-18 financial year, it made a loss of R5.6bn.

Satawu, one of the major unions at SAA, described Mboweni’s statements as “irresponsible”.

“Ever since his appointment less than a month ago, Mboweni has seen it fit to make irresponsible statements, including one about e-tolls that saw our mother body, Cosatu, in Gauteng and his own political party, the ANC, march to the Union Buildings,” said Satawu spokesperson Zanele Sabela.

“Mboweni rightly pointed out to the New York investors that SAA does not fall under his remit. If it did, then the honourable minister would have known that closing down the national airline would leave 8,000 people jobless. Add to that the at least five people who depend on each of the 8,000 salaries, then we’ll have ourselves an unmitigated disaster.

 “One imagines the minister went to New York to persuade investors to put their money in SA. Doesn’t it defeat the purpose if he tells the same investors that it is not likely any equity partner will want to put money in SAA?”

Sabela admitted that SAA has been making a loss for years.

“However, while Mboweni and his ilk have been making comments, SAA group CEO Vuyani Jarana and his team have been implementing a turn-around plan. The plan includes, among other factors, realigning the procurement process to ensure transactions beyond a set limit are centrally authorised, thereby cutting costs. The pricing model has also been overhauled to ensure tickets are not sold at a perpetual discounted rate. In the past, SAA would pay for services beforehand but now it only pays after delivery, thus enhancing its cash flow,” he said.

“In addition, a lot of thinking has gone into the routes the airline services to make sure fuel is not expended on empty seats. For instance, SAA used to have two London flights per day, now there’s just one. To attract and retain customers, the latest-generation Airbus with the latest in-flight entertainment is used on this route.

“Turning SAA around is a mammoth task and will not happen overnight. In the meantime, all we ask is for the minister of finance to restrain himself,” said Sabela.

phakathib@businesslive.co.za

Please sign in or register to comment.