DA calls for rethink of ‘mind-boggling’ SA Express bailout

The opposition has called for an end to state bailouts for struggling parastatal SA Express.

City Press reported on Sunday that taxpayers are losing R1 million a day pointlessly to pay for grounded leased aircraft, 13 of which have not flown for five months because most of them are effectively scrap.

The airline apparently can’t even return the aircraft to their owner, since they are not in their original condition and SA Express can reportedly not afford to repair them.

SAA will be bailed out to the tune of R5 billion, while SA Express will get upwards of a billion, Finance Minister Tito Mboweni announced this week.

DA MP Alf Lees said in a statement on Sunday that the “dysfunctionality and financial mess at the state-owned SA Express, make a complete mockery of the scheduled taxpayer bailout of R1.7 billion rand to SA Express”.

He said his party would propose amendments to the Adjustments Appropriation Bill to prevent the payment of the R1.7 billion to SA Express.

“Reports that SA Express is paying R40 million a month to lease aircraft that are essentially scrap because they have been stripped of useful parts is mind-boggling and brings into question the wisdom behind National Treasury’s decision to saddle the South African taxpayer with more funding for the airline.

“While SA Express cannot find money to keep its aircraft flying and generating revenue, there is no indication that the company’s highly paid board members and executives have had to forego any of their lucrative pay packets and bonuses.”

Lees pointed out that Mboweni had announced that even though revenue collection for the next three years is expected to come in at R85 billion less than the February budget, he still saw fit to add R1.7 billion for SA Express over and above the expenditure declared in the February budget.

“It is unconscionable that SA Express is kept ‘alive’ with taxpayer bailouts simply to provide ’employment’ and salaries to highly paid executives and staff. This bailout alone could have been used to pay an extra R12 per month for a full year to child grant recipients.”

He said his party believed that the only moral and logical option was to immediately put SA Express into business rescue, and if that fails, it needed to be liquidated.

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