Terminate the Takatso deal and liquidate SAA

Issued by Alf Lees MP – DA Member of the Standing Committee on Public Accounts
28 Sep 2022 in News

Please find attached soundbite by Alf Lees MP.

The DA calls for the immediate cancelation of the SAA/Takatso deal and liquidation of South Africa Airways(SAA) without any further taxpayer bailouts.

The clandestine deal between SAA and Takatso has taken 16 months to conclude but has not been implemented. In addition, court action has been launched by an unsuccessful bidder for the purchase of the airline or a part thereof.

It is likely that SAA has run up new operational losses in the region of R1 billion or more since its post business rescue operations resumed, and the proceeds from a liquidation are unlikely to meet these new liabilities. Furthermore, Takatso has reportedly indicated that they are not willing to take on any of SAA’s legacy debt, but only willing to fund future operations.

The latest blow to any hope of SAA rising was the news that the International Air Services Licensing Council (IASLC) has revoked 20 of SAA’s international routes without negotiation as the SAA ANC vanity project nose dives due to a lack of capacity.

SAA has apparently exhausted taxpayer bailout funds and seemingly some commercial banks and suppliers are apparently foolishly providing short-term working capital and credit facilities to prevent the airline from once again suspending its operations.

I have today submitted a parliamentary question to the Minister of Public Enterprises, Pravin Gordhan, to establish if SAA is utilising any Government Guarantees to raise working capital and credit supplies and if so what the extent of taxpayer liability is.

Conclusively SAA remains a fiasco that the taxpayer is yet again going to be fleeced for more bailouts in the October 2022 Medium Term Budget Statement. The taxpayer cannot be expected to continue footing the bill for SAA’s billion-rand deficits, all the while having a proposed private equity partner who sits idly by holding on to their own cash.

Having failed to heed the DA’s call for the full privatisation of SAA, Minister Pravin Gordhan should now free South Africans from the unsustainable SAA/Takatso deal by liquidating the airline and using the proceeds to pay off outstanding debt.