EDITORIAL: SAA is a leech, not a ‘public good’
Gordhan’s determination to support SAA, which appears to be at odds with the feelings of finance minister Tito Mboweni, is increasingly a matter of national concern
What, exactly, is Pravin Gordhan’s game? Espousing a developmental mandate is one thing, describing the tax leech that is SAA as a "collective responsibility" quite another.
This week, Gordhan exhorted South Africans to support SAA in its efforts to restore sales confidence and rebuild revenues in the shortest possible time. But buying an air ticket is a luxury increasingly few South Africans can afford.
Moreover, the stubborn insistence that SAA must continue means more money will be funnelled into an entity that serves only the middle class and the rich, away from the growing ranks of the poor who desperately need services — like health care, schooling and public transport. These are already being cut to assist the juggling act that the National Treasury — now paying off debt with more debt — is battling to manage.
Gordhan holds a uniquely polarising place in SA politics: loathed by the EFF, loved, initially, by the Zuma-must-fall brigade, he commands respect in the business community for his administration at the SA Revenue Service, his tenure as finance minister and his role in the campaign against Zuma. He has long been regarded as an honest public servant, a vanishingly rare commodity in SA’s political administration.
But his determination to support SAA, which appears to be at odds with the feelings of finance minister Tito Mboweni, is increasingly a matter of national concern. This is especially so when you consider that this week we learnt that the airline clocked up losses of R10.4bn over the past two years. And its liabilities exceeded assets by R13bn, a shortfall that will have to be met at some stage, most likely by the government. Yet there is no discernable plan to fix SAA in any sustainable way — it’s simply throwing money down a well.
Gordhan, of all people, knows the importance of good governance. Yet his continued intervention in the management of SA’s most parlous state-owned enterprises — Eskom and SAA — is deeply troubling, however necessary such intervention once seemed.
For one thing, there is meant to be a separation of powers that is critical to the robust functioning of a company: an empowered executive; a vigilant board; and a supportive, decisive shareholder. Each has its distinctive role.
The shareholder must set policy in line with the mandate it has been given, the board’s function is to oversee the executives to ensure that they are compliant with that policy, and the executives operating within those parameters should be left alone to run the business.
Yet it would appear that the department of public enterprises has, in recent times, become both indecisive and suffocating.
This indecision is one reason why SAA’s board has been unable to secure the funding it needs from commercial banks to continue as a going concern. In a series of leaked letters to parliament, the acting chair of SAA describes how "recent inconsistent messages" and the "hesitant and inconsistent approach" by government has created "huge uncertainty" over the airline.
It needn’t be like this. Elsewhere in this magazine we profile Erik Venter, the former CEO of Comair — a company that has existed, and thrived, for over 40 years without a cent of government support — who argues that SAA is simply irrelevant in a global aviation context.
No amount of shrinking taxpayer money or wishful thinking is likely to change this.
Let us be clear: SAA is not a matter of national pride, it is a vanity project with a dreadful cost to the fiscus. And it’s past its sell-by date.