Mon, 24 Feb 2020

ANC: State must keep SAA as a national airline

News24
22 Jan 2020, 23:44 GMT+10

The ANC National Executive Committee has agreed that South African Airways must remain a national airline, but that "substantial restructuring" will be required.

ANC secretary-general Ace Magashule made the remarks at a briefing on Wednesday, following an NEC meeting over the weekend where members discussed state-owned enterprises, among other matters.

The NEC is the highest decision-making body of the party.

"SAA should be retained as a national airline, which will require substantial restructuring. Cabinet should take the operational decisions needed to achieve that aim," Magashule said.

The cash-strapped national carrier was placed under voluntary business rescue in December. This week it cancelled a number of flights in an effort to save cash.

Referencing the ANC's January 8 statement - which sets out the party's position on a number of matters, and this year marked its 108th anniversary - Magashule said the fact that the flag carrier has been placed in business rescue to be "restructured and to be returned to financial sustainability" was both a demonstration of the depth of the crisis facing it and the determination of government to decisively address the matter.

"We will retain a restructured SAA. We will still be flying the South African flag. Government will deal with details," he said.

Government and private creditors have jointly committed to providing the national carrier with R4bn in new finance. However, National Treasury has not yet provided the R2bn it committed to the process.

The Department of Public Enterprises, under which the airline falls, on Sunday issued a statement to say government remains committed to the business rescue process, and was engaging with Treasury to source the funds and a strategic equity partner to keep SAA in the skies.

SAA has since cancelled both international and domestic flights as a means to save money.

The business rescue plan is to be finalised in February. Practitioners Les Matuson and Siviwe Dongwana have said that the priority is to ensure the airline can continue on a solvent basis - a preferred option than liquidation.

The practitioners are also set to be invited to Parliament to brief the public enterprises committee on their plans to turnaround the airline.

No blank cheques

Commenting on state-owned enterprises as a whole, Magashule said that while government should provide support to them as needed, such support must be contingent on them doing more to meet needs of people, and to do so affordably and efficiently.

"It cannot be a blank cheque that permits continued waste, inefficiency and in some cases corruption at the cost of our citizens, producers, and society as a whole," Magashule said.

He added that government should ensure the public enterprises operate efficiently and that where necessary their business models must be reviewed. Government must also ensure people "fit for purpose" are appointed to relevant positions at the entities.

"Appropriate forms of partnership with private companies, investors and workers will be considered where it will enable the public enterprises better to fulfil their developmental role," he said.

Magashule also stressed the importance of having SOEs operate independently. "We must avoid political interference in operational matters, other than interventions in the case of mismanagement and possible company failure," he added.

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