LETTER: SAA not a strategic asset
The national carrier is facing immediate funding challenges, as suppliers are reducing their credit risk to SAA by reducing payment terms from 21 to seven days.
The national carrier is facing immediate funding challenges, as suppliers are reducing their credit risk to SAA by reducing payment terms from 21 to seven days. This means that the airline needs an additional R7.5bn to fund day-to-day operations from December, on top of the R5bn bailout announced in September. SAA is expected to make another loss, despite this. The state has always argued that SAA is a strategic asset, but this is not true. Unlike other state-owned enterprises such as Telkom and Airports Company SA that make profits and pay dividends, SAA is a black hole for public funds. Comair has been delivering profits for more than 70 years, trading under the same tough conditions as SAA, without government bailouts. If the state really wanted to own an airline as a strategic asset, it would buy more than 50% of the shares in Comair and become the majority shareholder. The notion that the partial privatisation of SAA will lead to job losses is a fiction. The continued bailouts ...
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