DA calls for urgent meeting on SAA

THE DA has called for an urgent parliamentary meeting to work out how to prevent SAA from missing payments to its creditors and being grounded by international partners.

This week Hong Kong’s tax authorities threatened to ground SAA if the struggling airline did not provide financial statements by September 6.

SAA has failed to submit financial statements for the past two years, with results for 2015/16 held back by the Treasury’s refusal to grant it R5 billion in additional guarantees.

If SAA does not file an earnings report it cannot get government guarantees and ensure payment for services in airports, including Hong Kong.

Finance Minister Pravin Gordhan, who is leading a turnaround strategy that includes a new board, asked Parliament last month to push back the release of SAA’s 2015 earnings report to September as his department considered whether to grant the company the money it needs to stay aloft.

Ensnared in controversy and financial mismanagement, the airline has been surviving on state guarantees of around R14.4bn and has been singled out as a major risk to the country’s investment grade status.

The DA said this week’s abrupt resignation of SAA’s audit head Yakhe Kwinana, a pending R250 million loan repayment and an impasse between SAA chairwoman Dudu Myeni and the finance minister, were pushing the airline to almost certain collapse.

“Even worse is that SAA’s R14.4bn in government guarantees has been completely depleted, leaving it without any options,” DA MP Alf Lees said, the party’s deputy finance spokesman in a statement yesterday.

“If a further bailout from government is to be avoided, SAA must immediately be placed under business rescue.”

SAA spokesman Tlali Tlali referred questions on the matter to the Treasury, which did not respond to requests for comment.

Gordhan and President Jacob Zuma have disagreed about government spending, analysts say.

Respected Nhlanhla Nene was axed as finance minister in December just weeks after he vetoed a plan by Myeni to amend a cost-saving deal with the French manufacturer Airbus.

On Thursday, the presidency defended plans to give Zuma supervision of stateowned enterprises after Gordhan’s allies said this would limit his control. – Reuters