SAA financial crisis deepens

FLYING LOW: SAA is flying into a series of new crises over money and its management
FLYING LOW: SAA is flying into a series of new crises over money and its management

Halt all loans and get rid of Myeni, DA demands

A CALL was made yesterday for the national Treasury “immediately and publicly” to reject South African Airway’s request for a further bailout of R5-billion.

DA public enterprises spokeswoman Natasha Mazzone said the bid for more funding was ludicrous given the financial constraints facing the country.

At the same time, state-owned SAA announced it had removed its acting chief executive, after a recent walkout by senior executives added to management woes faced by the airline.

Thuli Mpshe held the position for just four months after the departure of her predecessor.

She is SAA’s seventh chief executive in three years.

In the call to cut off funding, which was accompanied by demands that the airline be privatised, Mazzone said providing more money would have wideranging consequences.

“It will drive our economy over the fiscal cliff‚ undermine economic growth and result in job losses,” she said. It was time the Treasury stopped “tip-toeing” around the crisis.

“We need bold leadership now. To this end‚ the DA calls on the Minister of Finance [Nhlanhla Nene] to initiate a process that would see SAA privatised.”

Mazzone said it had been confirmed yesterday that SAA had made a further loss of R648-million in the first six months of the financial year “and is looking for further guarantees from the government to the tune of R4-billion to R5-billion so it can finalise its 2014-15 financial statements.

“This follows the Treasury granting SAA a further guarantee of R6.5-billion just last December‚” Mazzone said.

“We therefore also call for the chairperson of SAA‚ Dudu Myeni‚ to be suspended – immediately.

“Ms Myeni seems resolute on destroying this entity.

“She has lost all support‚ evidenced by the resounding vote of no confidence in her by pilots.”

In its announcement on Mpshe losing her job as chief executive, SAA said that the head of the technical division, Musa Zwane, had been appointed acting chief executive, while Mpshe would return to her role as general manager for human resources.

The reshuffle comes after a controversial push by SAA chairwoman Dudu Myeni to renegotiate a deal to lease five A330 aircraft from Airbus, a move opposed by the government because of funding challenges.

In Business Day yesterday, Myeni said SAA had initially ordered 41 aircraft from Airbus in 2002, and most of them had been delivered and paid for.

“In our current discussion, we have agreed with Airbus to swap delivery of 10 outstanding A320s for five A330s, which are more suitable for long-haul flights,” Myeni said.

“The swap from A320s to A330s is not under debate.

“As always, the issue is how it will be funded.”

SAA has maintained that the A330s would enable the airline to service long-haul routes more cost-effectively.

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