While finance minister, Tito Mboweni, had no room for maneuvers during his Mid-Term Speech, he now speaks up on his plan for saving the state coffers!
Speaking at an investor conference in New York, Mboweni noted that decisions over the future of the state carrier SAA were ultimately not under his control, but that it was difficult to see a turnaround for the airline. “It’s loss-making, we are unlikely to sort out the situation, so my view would be close it down,” Mboweni said. “Why I say close it down is because it’s unlikely that you are going to find any private sector equity partner who will come join this asset,” Mboweni added.
In May SAA reported losses of R5.7 billion over the financial year. During the Mid-Term Budget Mboweni read out his predecessors plans to bail out SAA with another cash grant of ZAR 5bn, but now he is able to comment what was really needed to stop this drain from state revenue. In the meantime it is even worse: SAA CEO Vuyani Jarana has said he is mapping out a punishing austerity plan to turn the national carrier around, which will reportedly require R20 billion to implement. He has said layoffs and other cuts were unavoidable. The airline is only expecting to break even by 2021, another 3 year drain by the black hole called SAA?
Surely not with him. It is now up to Pravin Gordhan to support this statement and in his capacity as Minister for Public Enterprises to “pull the long-awaited plug”!