DA supports call for SAA to find “strategic equity partner”

Issued by Alf Lees MP – DA Shadow Deputy Minister of Finance
10 Jul 2018 in News

The DA welcomes reports that the CEO of South African Airways (SAA), Vuyani Jarana, has committed to finding a “strategic equity partner” for the struggling airline.

The DA was alarmed when, in May of this year, reports surfaced of a “commitment letter” from National Treasury which suggested that government was to provide R21,7 billion to the ailing parastatal.

Although we hope that reports are true and SAA’s current CEO does not renege on this latest commitment, we do have our doubts about whether or not SAA will succeed in its search for an equity partner after recording losses of R5,67 billion in the 2017/18 financial year.

With massive state guarantees and frequent multi-billion rand bailouts, SAA and dysfunctional state-owned entities (SOEs) like it pose a significant threat to the financial stability of the country.

Any solution that addresses this risk and sets SAA on the path to recovery must be welcomed. Indeed, South Africa needs a re-evaluation of all SOEs and restructuring SAA may serve as a model for other parastatals.