Saturday, August 25, 2018

Control over SAA officially transferred to Pravin Gordhan’s public enterprises

A presidential proclamation
published on Wednesday (1 August), will see South African
Airways (SAA) officially report to the minister of public
enterprises, Pravin Gordhan.
The proclamation, which was signed on 25 July, comes after the
troubled state-owned enterprise reported to National treasury
for over four years.
Speaking to the Mail &
Guardian
, Gordhan said his department was now well
placed to ‘consider strategic alignment and synergies between
SAA and SA Express.’
“I have had a joint meeting with the chairs and deputy chairs
of both airlines and we will now start the process of
formalising a joint board committee to give effect to this
strategic alignment and operational consolidation.”
This is likely a signal of Gordhan’s previous intention
that government’s sale of a stake in its aviation assets
include SA Express as well, the Mail & Guardian
reported.
Financial Crisis
SAA chief executive officer Vuyani Jarana has repeatedly said
an aviation investor could be the answer to the financial
crisis at SAA, which hasn’t made a profit since 2011 and
received a government bailout last year to avoid a debt
default.
While no candidates have ever come forward, the Gulf airlines
have been mentioned before, given their routes from major
African cities to Middle East hubs and on to Asia or Europe.
While Emirates has since
indicated that they are not interested in purchasing a stake,
questions remain around SAA and Etihad.
The two airlines briefly had a code-sharing agreement, but it
was scrapped when the South African carrier ended direct
flights between its home base in Johannesburg and Abu Dhabi in
2016.
A partner would enable SAA to share costs, improve customer
service and receive a capital injection, Jarana said in an
interview after taking the role in November.
The airline will require over R12 billion more in government
bailouts just to cover its losses, analysts have said.

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