Private airlines beg for government rescue
Request a dilemma for government
Private airlines in the country, battered by the outbreak of the novel coronavirus, have joined their sate-owned counterparts in a bid to be included in the government’s Covid-19 rescue package.
The Airlines Association of Southern Africa (Aasa) has written to the National Treasury asking for urgent intervention from government in the airline industry, following the prohibition of air travel as part of measures to curb the spread of the coronavirus in the country.
“Aviation will be a crucial role player in the South Africa recovery plan for business travel, tourism and trade and the economy in general, being an enabler for the quick and efficient transport of people and goods. Whilst many states around the world are considering aid to support their own airlines, it is important that South Africa does the same for its own,” Aasa chief executive Chris Zweigenthal said in a letter dated April 17.
Aasa’s members include privately owned airlines Comair, Cemair, Airlink, Safair, as well as state-owned SAA, SA Express and Mango.
The airline industry’s desperate bid to get state aid comes as SAA battles to get more funding to stay afloat, amid a business rescue process and the outbreak of coronavirus.
Last week, Public Enterprises Minister Pravin Gordhan rejected a request by business rescue practitioners at SAA for an additional R10-billion to avoid the national carrier going under.
Gordhan told the business rescue practitioners – Les Matuson and Siviwe Dongwana – that responding to the pandemic had already stretched government finances and that they should work within their available resources.
A meeting between Gordhan and the unions at SAA on Tuesday resolved that “a new financially viable and competitive airline” should be formed from the business rescue process.
A source in the ANC privy to the discussions on SAA said the application for state aid by private airlines put the government in a tight corner.
“You can’t fund private airlines when you have not rescued your own airline,” he said, speaking on condition of anonymity.
The source said the meeting of the officials of the ANC, SACP and Cosatu had resolved that SAA should be restructured instead of liquidated.
Zweigenthal said they had written to President Cyril Ramaphosa last month and the Department of Trade and Industry in their efforts to get government to help the airline industry.