Embattled SAA seeks new equity partner

PARLIAMENT is backing moves by the embattled South African Airways in its search for a strategic equity partner in the hope of sparking a turnaround for the country’s national carrier.

The airline recently gave in to pressure by the Solidarity Union, which threatened to place it under business rescue, after months of being dependent on bailouts from the National Treasury.

Chairperson of the standing committee on finance, Yunus Carrim, said: “The committee has for some time now expressed its support for SAA acquiring a suitable equity partner, in view of its parlous financial state and the severe constraints on the national budget.

“However, we believe that majority ownership must remain in state hands, and we don’t support the DA’s view that SAA should be fully privatised,” said Carrim.

The airline’s irregular expenditure came to R125.9 million and fruitless and wasteful expenditure amounted to R40.4 million according to the auditor-general’s report for the previous financial year.

The ailing entity had failed to make a profit since 2011. The airline revealed a R5.6 billion loss for the year to March 2018, with revenue dipping to R1 billion below its forecasts for the period.

Carrim said the committee preferred “SAA securing a strategic equity partner when it was stronger”.

“We understand the financial stresses that make it necessary more immediately. We would be keen to see who SAA decides on as a partner and on what terms.

“Getting an equity partner is only part of the solution, and it has to be part of SAA’s overall turnaround strategy that has to be effectively implemented,” said Carrim.

MPs said the matter needed to be approached with caution due to the vulnerability of the carrier.

EFF MP Floyd Shivambu said the party would not support the stance by SAA until the party had been well informed as to how the strategic partner relationship would be structured.

“We don’t support the recent stunt by the SAA to look for strategic partners. The reason we don’t support this move is because we have not been told in great detail of what that would mean and the shape of this strategic partnership,” said Shivambu.

UDM MP Nqabayomzi Kwankwa said finding a strategic equity partner for the embattled carrier would save the public purse from bailing it out.