Control over SAA officially transferred to Pravin Gordhan’s public enterprises

A presidential proclamation published on Wednesday (1 August), will see South African Airways (SAA) officially report to the minister of public enterprises, Pravin Gordhan.

The proclamation, which was signed on 25 July, comes after the troubled state-owned enterprise reported to National treasury for over four years.

Speaking to the Mail & Guardian, Gordhan said his department was now well placed to ‘consider strategic alignment and synergies between SAA and SA Express.’

“I have had a joint meeting with the chairs and deputy chairs of both airlines and we will now start the process of formalising a joint board committee to give effect to this strategic alignment and operational consolidation.”

This is likely a signal of Gordhan’s previous intention that government’s sale of a stake in its aviation assets include SA Express as well, the Mail & Guardian reported.

Financial Crisis

SAA chief executive officer Vuyani Jarana has repeatedly said an aviation investor could be the answer to the financial crisis at SAA, which hasn’t made a profit since 2011 and received a government bailout last year to avoid a debt default.

While no candidates have ever come forward, the Gulf airlines have been mentioned before, given their routes from major African cities to Middle East hubs and on to Asia or Europe.

While Emirates has since indicated that they are not interested in purchasing a stake, questions remain around SAA and Etihad.

The two airlines briefly had a code-sharing agreement, but it was scrapped when the South African carrier ended direct flights between its home base in Johannesburg and Abu Dhabi in 2016.

A partner would enable SAA to share costs, improve customer service and receive a capital injection, Jarana said in an interview after taking the role in November.

The airline will require over R12 billion more in government bailouts just to cover its losses, analysts have said.

Read: Emirates doesn’t want to invest in SAA

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Control over SAA officially transferred to Pravin Gordhan’s public enterprises