Pravin Gordhan defends decision to privatise struggling SAA

Public Enterprises Minister Pravin Gordhan has defended the decision to privatise struggling South African Airways (SAA).

This comes after the Economic Freedom Fighters (EFF) threatened to take legal action against the government over the sale of 51% of SAA to Takatso Consortium.

Malema suggested that the sale of SAA was part of a plan by government to privatise all the state-owned enterprises (SOEs) in the country.

“There is absolutely no rationality in selling off an airline for R51 to people who are linked to and controlled by the white capitalist establishment,” said Malema.

“We will do everything in our power to reverse the sale of SAA because it is evident that all state-owned companies will first be made to not function well, and thereafter given for free to the white capitalist establishment.”

Government’s plans to sell a stake in SAA to Takatso was announced after the airline was forced into business rescue in December 2019.

Gordhan described SAA as a fiscal drain costing government more than R49 billion in bailouts since 2006 and failing to make a profit since 2011.

“Despite its rich history, SAA has struggled financially over the past decade because of gross mismanagement and corruption, state capture and abuse of SAA resources. This caused persistent financial losses, internal controls were decimated, there was a breakdown of consumer trust and confidence, and ultimately a loss in market share.”

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Gordhan said the challenges have been further exacerbated by the Covid pandemic, which affected the domestic and global aviation sector.

“You have a distressed asset, which you could have disposed of, and there would have been a sale of some of the buildings and so on, all 4,000 odd staff would have lost their jobs and would have walked away with something like R28,000. The alternative was better both for the staff and the airline that we can actually make it work.”

Malema, however, warned of potential litigation against the sale.

“We have referred the matter to our lawyers because we believe strongly that we should take this matter to court and make sure that this deal is reversed by our deal courts.

“You can’t sell an airline for R51. Not even a single plane costs R51 or a part of it. We are going to reverse the deal. SAA should not be for sale,” Malema said.

Earlier this month, National Treasury raised concerns that government will have to source most of the funding for the partnership with Takatso Consortium to acquire the embattled airline.

ALSO READ: Treasury concerned about SAA deal with Takatso Consortium