Public enterprises puts SAA on notice

Public enterprises minister Pravin Gordhan has warned loss-making SA Airways (SAA), which is facing R14bn in debt repayments by March, to implement its turnaround plan with “a greater sense of urgency”.

Just three days after finance minister Tito Mboweni suggested SAA should be closed down, Gordhan’s department said it was a ‘‘good airline but a poorly run business’’.

‘‘Bad decisions were made by previous boards and management, including allowing corruption to incapacitate the airline,’’ the ministry said in a statement on Sunday.

“Against this background the immediate priority for the ministry of public enterprises is to stabilise SAA financially and through a rigorous process of cost reduction and commercial reorientation, to turn it into an airline that is financially and operationally sustainable.

“The ministry will place the board and management on notice to discharge, with a greater sense of urgency … their professional duties to identify and implement immediate interventions.”

Mboweni’s call for the disbanding of the airline was made view at an would investor be close conference” it down, he in New York on Thursday. “It’s loss-making. We are unlikely to sort out the situation, so my told delegates at the conference.

The ministry said on Sunday the reforms needed to include “addressing the airline’s costbase, stopping all fraudulent contracts, disciplining and instituting appropriate civil and criminal actions against all persons inside and outside the business who are implicated in corruption, and preparing SAA for a strategic equity partner ...”

“The latest midterm budget policy statement showed that, firstly, there are no holy cows and, secondly, there is no room for bailouts. What we’re saying to the board is that you don’t have till 2021 to act. You need to act now,” said ministry spokesperson Adrian Lackay.