TIME TO CRA
SAA is one of the oldest airlines around, having begun life with just 40 staff and the first multi-engine aircraft in the world in 1934. But the airline hasn’t made a profit in seven years, while it continues guzzling money from taxpayers who are getting
There is no consensus on what to do about SAA, but the SA economy would survive if the airline shut down
At an investment conference in New York in November last year, finance minister Tito Mboweni shocked the audience and his own party (and perhaps even himself) by suggesting SAA should be shut down.
SAA, its new board, and members of the government were furious. He was rebuked by the ANC, public enterprises minister Pravin Gordhan and ultimately President Cyril Ramaphosa.
But Mboweni did raise a legitimate question that shouldn’t be wished away: does SA even need SAA?
The consensus among economists and airline experts is that well yes, it should be closed. Or maybe not; or perhaps, but not yet; or let’s try something else. Or what about partial privatisation first? Or why not try a public-private partnership? Or how about a share-issue process?
There is in fact no consensus. But Mboweni’s suggestion has released the genie from the bottle and opened the parameters of the debate. Now everything is on the table in addressing this perennial problem — which is stoking divisions, even within the ANC — about what to do in the face of SAA’S losses, widening as they are from merely large to gobsmackingly, eye-poppingly huge.
The losses — now running at about R250m a month, or R18.05bn between 2012 and 2017 — have split the cognoscenti into three broad camps:
First, there are those who think SAA is fundamentally viable and can be fixed, even under full government control, if it were only run efficiently and professionally.
Second, there are those who favour a partial privatisation or finding a new strategic investor. They think the government should support SAA towards that end — which has the additional advantage, one so beloved by politicians, of kicking the can down the road, until after the election at least.
Third, there are those who think it is not viable and could never be in the future. Mboweni would seem to fall into this camp.
Back in 2017, while defending the state’s role in SAA, former finance minister Malusi Gigaba reflected the general position of the