Deputy minister of finance, Mondli Gungubele, has told parliament that, over and above the R10 billion already paid to SAA in 2018 – as well as the existing R9.2 billion currently owed to lenders – the airline will require an additional R12 billion in bailouts over the next three years.
According to the Democratic Alliance, this has proven that the national airline is beyond repair, with no possibility that it will ever be able to trade its way out of debt.
Speaking to parliament, Gungubele said that SAA would need another government bailout in the 2018/19 financial year of R5 billion – with another R5 billion needed in 2019/2020, and another R2 billion needed in 2020/21.
This would allow the airline to continue operations, and also to help service its debt – which matures in March 2019.
However, DA shadow deputy minister of finance, Alf Lees, noted that this would equate to a total of R31 billion of taxpayer money being used for SAA bailouts – just to fund losses without any purchases of new aircraft.
“The deputy minister informed parliament that the calculated cost of liquidating SAA would amount to a massive R60 billion,” Lees said.
“The choice facing the South African taxpayer is to pay another R21 billion and take the risk that SAA will be profitable by 2021, and will remain profitable thereafter, or to cut the losses and pay R60 billion to shut SAA down immediately,” he said.
According to think tank, the Free Market Foundation, the writing has been on the wall for a long time, with the group saying the national airline is completely unfixable in any way.
“It is too late for business rescue, privatisation, selling SAA assets or turn-around plans. SAA is broke and unfixable,” the group said.
“Talk of privatisation and finding an equity investor to inject cash is nonsense. No private enterprise in their right mind is going to touch SAA. There is nothing worth buying.”
SAA is one of the state-owned companies at the centre of a probe into the mismanagement of funds at state-owned entities under the administration of former President Jacob Zuma.
The portfolio committee on public enterprises last month reiterated its intent to serve summons to former SAA chair Dudu Myeni, under whose management the airline failed to properly value assets or correctly record irregular or wasteful expenditure.
SAA’s net loss widened more than threefold to R5.6 billion in the 2017 financial year.