TURNAROUND STRATEGY
SAA could fly after a business rescue
The question is not whether SA can afford to lose SAA, it is whether the country can afford to keep it
Taxpayers’ money spent on South African Airways’ (SAA’s) accumulated losses is enough to build another 117 Nkandlas. SAA has been the poster child for maladministration of state-owned entities (SOEs) for almost a decade, desperately unprofitable for six years and completely overburdened with debt. There is serious concern about its future. In March, the auditor-general reported that there were issues of material concern about SAA’s capability to meet its financial obligations in the coming year. He also described governance and controls at SAA as completely inadequate. Despite this, the SAA board appeared before Parliament’s standing committee on public accounts on April 24, saying that the airline required R5bn immediately to survive. It is obvious to most South Africans that the situation at SAA cannot be allowed to continue. Optimistic estimates are that it will cost the taxpayer an additional R21bn over the next three years to stabilise the airline if it implements a turnaround ...
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