A draft rescue plan for the South African Airways (SAA) drawn up by business rescuers Les Matuson and Siviwe Dongwana – and what the DA says he had in mind – shows that the government has agreed to give another R21bn to the struggling airline.
Alf Lees, a DA member of the standing committee on public accounts (Scoring), says the proposal is part of a plan for a re-imagined new shipping company to be set up as a government enterprise by the government.
According to the draft document, the government will stand for billions of rands to get the new shipping company going.
According to the draft rescue plan, the “new SAL” will fall under a new holding company that will also oversee SAA City Center (SACC), SAL Technical, Air Chefs and the low cost airline Mango.
Lees says the new plans come as no surprise and come after a spirited political campaign by Public Enterprises Minister Pravin Gordhan to discredit the business rescue process and continue the pattern of failure by calling for the establishment of a new shipping company .
“The business rescue practitioners and the minister who are now singing the same hymn as Gordhan show the minister has hijacked the process,” says Lees.
He says if the draft plan is accepted in its current format, SAA will continue to be a black, fiscal hole for years to come. The business savers predict that the “new SAA” will be operating at a massive loss of R19.9 billion over the first three years.
A loss of R8,1 billion is forecast for the first year, a loss of R7,5 billion for the following year and another loss of R4,3 billion for the third year.
These losses do not include any trade losses at Mango, SAAT, Air Chefs or SACC – and this could amount to billions of rands more, warns Lees.
“The madness of SAA rescue, on the basis set out by the business rescuers, should not be seriously considered. The only credible route for the business rescuers is to bring a court application to the SAA in terms of sec. Liquidate 81 of the Companies Act, ”says Lees.
