Home / Africa / SAA ‘should be shut down’, says Finance Minister Tito Mboweni

SAA ‘should be shut down’, says Finance Minister Tito Mboweni

Passengers board a South African Airways plane at the Port Elizabeth International Airport in the Eastern Cape province, South Africa, September 30, 2018.

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Reuters

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Taxpayers have paid over $2bn since 2012 to keep the struggling national carrier in the air

South Africa’s state-owned airline should be shut down, the country’s new finance minister has said.

“It’s loss-making, we are unlikely to sort out the situation, so my view would be close it down,” Tito Mboweni told an investor conference in the US.

One of Africa’s biggest airlines, South Africa Airways (SAA) has lost money every year since 2011, and survives with government support.

SAA is among the struggling state firms that the president promised to revive.

No sacred cows

Just over three weeks into his post, Mr Mboweni is keen to show how there are no longer any sacred cows for a government and a country facing huge economic challenges, says the BBC’s Andrew Harding reporting from Johannesburg.

While it is not yet government policy, the finance minister has made clear the urgent need to slash spending.

“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,” he told the conference in New York.

The CEO of SAA, Vuyani Jarana, is reported by Reuters news agency as saying he is mapping out a strict austerity plan to turn the national carrier around, including making redundancies.

South African Airways has “quietly scaled back” on the number of flights and routes it operates, according to the aviation website Simple Flying.

It says European carriers like British Airways and Lufthansa have since seized it as an opportunity to expand their South African presence.


Election priorities

By Andrew Harding, BBC Africa, Johannesburg

SAA has just been given another huge government bailout, this time of 5bn rand ($349m; £268m).

Under former President Jacob Zuma, the national carrier became tied up in politics – sticking with unprofitable international routes, and piling up debts.

But with an election coming, the governing ANC needs to show its priorities are tackling unemployment and corruption – not subsidising an unprofitable airline mostly used by the middle classes.

SAA ‘should be shut down’, says Finance Minister Tito Mboweni

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