SAA is a bankrupt black hole that should be liquidated – DA
The Democratic Alliance (DA) has rejected the latest proposed business rescue plan for SAA and called on Finance Minister Tito Mboweni to oppose it.
According to the DA, a total of R32.65 billion of government funds will be needed to carry out the plan.
Party MP Alf Lees has slammed the proposal from SAA business rescue practitioners (BRPs) Les Matuson and Siviviwe Dongwana as ridiculous.
“SAA has been bankrupt for the past decade, relying on bailout after bailout as a succession of poor CEOs squandered all hope of profit and goodwill with poor business practice,” Lees stated.
“In no way, shape or form should the government be handing out R33 billion bailouts to a bankrupt black hole of an entity that has not contributed anything to our economy for ten years,” Lees noted.
He said the only realistic option which remained for SAA at this point was liquidation.
According to the party, the total cash requirements for SAA over the next three years would involve the following:
- Lenders – R16.4 billion
- Staff retrenchments – R 2.2 billion
- Unsecured creditors – R 0.6 billion
- Secured creditors – R 1.7 billion
- Unflown ticket claims – R 3.2 billion
- Mango – R 1 billion
- SAA Technical – R 1 billion
- Air Chefs – R 0.15 billion
- Trading losses (SAA only) – R 6.4 billion
- Trading losses: Mango/SAAT/Air Chefs – unknown
- Total cash required – R 32.65 billion
Lees said the DA will also write to the Competition Tribunal, as it was of the view that the bailout violated the Competition Act.
The party believes the carrier will get an unfair competitive advantage over the other South African airlines – none of which have been granted bailouts but remained profitable.
Bailout is inhumane
Lees added the fact that South Africans were already burdened by the impact of the COVID-19 pandemic makes the BRPs proposal to spend such an “obscene amount” of taxpayers’ money utterly ludicrous.
“There is an economic meltdown, and we are facing a humanitarian crisis as millions of people are desperate and wondering how to provide food for themselves and their families – never mind the added worry of other bills to pay,” Lees said.
“Some have not been paid for months and millions may lose their jobs if they haven’t already.”
“It’s inhumane that it would even be considered,” Lees concluded.
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