What if we just shut down SAA?
SAA is one of the oldest airlines around, having begun life with just 40 staff and the first multi-engine aircraft in the world in 1934. But the airline hasn’t made a profit in seven years, while it continues guzzling money from taxpayers who are getting sick of bailing it out. It is time to ask, as Tito Mboweni did, if it should just be closed down. How bad would that really be?
At an investment conference in New York in November last year, finance minister Tito Mboweni shocked the audience and his own party (and perhaps even himself) by suggesting SAA should be shut down. SAA, its new board, and members of the government were furious. He was rebuked by the ANC, public enterprises minister Pravin Gordhan and ultimately President Cyril Ramaphosa. But Mboweni did raise a legitimate question that shouldn’t be wished away: does SA even need SAA? The consensus among economists and airline experts is that well yes, it should be closed. Or maybe not; or perhaps, but not yet; or let’s try something else. Or what about partial privatisation first? Or why not try a public-private partnership? Or how about a share-issue process? There is in fact no consensus. But Mboweni’s suggestion has released the genie from the bottle and opened the parameters of the debate. Now everything is on the table in addressing this perennial problem — which is stoking divisions, even with...
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