The Democratic Alliance (DA) wants Minister of Public Enterprises Pravin Gordhan to take “a bold and necessary step” of liquidating South African Airways without delay.
This comes as the party welcomed the decision by the Business Rescue Practitioners (BRP) appointed to SA Express to liquidate the company as “there was no reasonable prospect for the airline to be rescued”.
DA Shadow Minister of Public Enterprises / MP Ghaleb Cachalia said in a statement on Friday: “This is long overdue. Despite successive government bailouts amounting to R1.5 billion received by SA Express over the past two years, the airline is insolvent as its current liabilities exceed its current assets by R374 million during its 2019 financial year.
“It recorded a loss of R591 million in 2019, more than three times the previous year’s R162 million loss.”
Cachalia said the department of public enterprise’s (DPE) decision to withhold further funding to the moribund entity had acted as a spur to the Rescue Practitioner’s decision to liquidate the airline.
He said the result of liquidation comes as the department and the rescue team were going back and forth about the airline’s financial woes.
“While this eventuality was occasioned by a spat between the DPE and the BRP, it reflects the inescapable reality of an entity whose financial position is so dire that the March 2020 salaries to its 691 employees have not been paid,” the MP said.
Cachalia suggested that Gordhan should liquidate the SA Express parent company, which also has its struggles financially.
“The minister responsible for public enterprises would do well to apply the same logic to SAA, and other defunct entities, which is equally bankrupt and represents a considerable ongoing drain on the fiscus at a time of national crisis, where the funds potentially earmarked for shoring up a failed company could be better employed in the battle against Covid-19.
“We do not need a flying albatross – what is needed is all hands on deck in the ship’s infirmary.
“The DA calls for Minister Pravin Gordhan to take this bold and necessary step without delay. The country will thank him for it,” Cachalia concluded.