Gordhan welcomes SAA bailout, slams criticism
The Minister of Public Enterprises Pravin Gordhan has welcomed the government bailout of R10,5 billion to fund the business rescue plan for the restructuring of South African Airways (SAA).
On Wednesday, Finance Minister Tito Mboweni told the National Assembly during his medium term budget that Treasury would inject the additional funds into SAA.
Spokesperson for the Department of Public Enterprises (DPE), Sam Mkokeli, says while the minister is happy with the government's commitment to helping SAA, he is however shocked and disappointed with criticism from the opposition The Democratic Alliance (DA), as well as other parties and some analysts.
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Gordhan has hit back at this as a “lack of insight, financial literacy and understanding of governance processes."
Mkokeli adds: "Worse, the DA ignores the suffering of SAA employees and the threat of losing their jobs. In order to hide their knowledge of the aviation sector and its economics, the DA and their
partners manipulate facts to fabricate false ideas about SAA."
Mkokeli says failure to allocate the funds would have resulted in the liquidation of the airline at the cost of more than R18.5-billion.
The department says the liquidation would have meant that SAA employees would have been worse off and received a maximum of approximately R32 000 per staff member, regardless of years of service, to the extent that there are funds available.
"They will only receive payment once the final liquidation and distribution account has been approved which can take up to 24 months.
The Ministry believes that the completion of the business rescue process is the only viable alternative to a viable and sustainable national carrier – one which supports job preservation and the ability to bring the airline back from the brink," says Mkokeli.
He adds the R10.5-billion will pave the way the finalisation of the business rescue process and restructuring of the airline.
"The Department of Public Enterprises is engaging constructively towards the national interest objective of the formation of a new airline in the first half of 2021, which will be run professionally and sustainably to support key economic sectors – including tourism, and solidify South Africa as an African gateway to international markets,"
