Airline over quality education? – Twitter reacts to SAA bailout

The government will press ahead with a new lifeline for the national carrier. Image: Shutterstock

SAA is set to receive R6.5 billion to settle its guaranteed debt and R10.5 billion to implement its business rescue plan.

The medium-term budget policy statement (MTBPS) tabled by Finance Minister Tito Mboweni on Wednesday has drawn a mixed response from the public, including unions, lobby groups and opposition parties.

The latest MTBPS comes during the global Covid-19 pandemic and different lockdown levels in South Africa which has left the economy in tatters as the government’s expenditure plans lays out its priorities going forward.

One of highlights of Mboweni’s speech was the announcement SAA will receive another lifeline with the latest bailout.

SAA is to receive R6.5 billion to settle its guaranteed debt and R10.5 billion to implement its business rescue plan.

Mboweni said the MTBPS stated the allocation was mainly funded through reductions to the baselines of national government departments, their public entities and provincial and local government conditional grants.

However, the minister said the MTBPS made no mention of private sector funders, equity investors and partners for a future restructured SAA.

The matter has prompted some underwhelming responses from South Africans on social media with one Twitter user claiming the government was sacrificing “quality education”.

“No, I’m confused because njani? R10.5 billion? How is a country like this sacrificing peacekeeping and quality education for an airline with only the “tourism” stance,” the user said.

Meanwhile, Public Enterprises Minister Pravin Gordhan has welcomed the government’s commitment to provide R10.5 billion to finalise the airline’s business rescue plan and restructuring of the airline.

In a statement on Thursday, Gordhan, however, said he was “shocked” and “disappointed” that opposition parties and analysts had a “lack of insight, financial literacy and understanding of government processes”.

Gordhan argued that if the SAA did not receive another bailout from the government to finalise the airline’s business rescue plan, it would have resulted in liquidation with a price tag of R18.5 billion, which would have been worse for its employees.

“The ministry believes the restructuring contained in the business rescue plan for SAA is fundamental and will create a solid base for the emergence of a competitive, viable and sustainable national airline for the Republic of South Africa.

“The cumulative effect of these actions is the government will be partnering with the private sector in the launch and management of the new airline and relieving the financial burden from the fiscus.”

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