Pravin Gordhan. Photo: GCIS
South African Airways (SAA) cannot become a liability to the state, Finance Minister Pravin Gordhan said during a post-cabinet briefing on Thursday.
Speaking during a post-cabinet briefing in Pretoria on Thursday, Gordhan told media that Treasury is stabilising the embattled national airline to ensure its profitability.
SAA, which last posted a full-year profit in 2011, confirmed to Bloomberg on Wednesday that Citigroup cancelled a R250-million banking facility for SAA on December 24, meaning SAA might not have access to free cash as of Friday.
The airline, which has been surviving on R14bn of government-debt guarantees, has asked Treasury for further guarantees amid calls that its chairperson, Dudu Myeni, be fired.
“The word bailout is used too loosely (with regard to SAA),” said Gordhan. “It is a lot more complicated than a bailout.”
“Our objective is to stabilise the airline, (and) to ensure the company returns to some form of profitability,” said Gordhan.
He said SAA must not be a liability to the fiscus. Instead it should get to a position where it pays out dividends.
“It must learn to stand on its own two feet,” he said. “It applies to all state-owned companies.”
“Their reliance on the fiscus in the coming period is something we are going to pay attention to.”
In order to borrow, SAA had to display confidence that it has an efficient management team and will return to profitability.
He said Treasury met with SAA’s management once a week to ensure that they manage their cash properly.
