African National Congress (ANC) chairman Gwede Mantashe has said that South African Airways (SAA) must be sold off if it cannot make money.
Speaking at an ANC birthday rally in Komga in the Eastern Cape on Saturday, Mantashe said SAA was an ‘elitist’ airline that did not serve the interests of the working class and should be sold to private buyers if it is unable to generate a profit.
‘SAA, if it is always asking for money and it does not fly the working class but only elites, you must wake up and say “these airlines are for elites … [subsidising them] is not subsidising the working class”.
‘You can give SAA to anyone to run it. It is not flying the working class.The only ones who are ferrying the working class are the buses and the taxis. If we were giving this money to the buses, taxis and trains, you would have a case.’
Mantashe’s comments contradict the ANC national executive committee, which is opposed to shutting down or selling SAA and wants it to be restructured.
IRR analysts say Mantashe is right that there is no need for a government to own a loss-making airline. Airlines operate most effectively if they compete with one another. Currently, private airlines are forced to compete with one another and with SAA, although only the latter is subsidised by the tax payer.
President Cyril Ramaphosa, meanwhile, has expressed his unhappiness with the decision of SAA business rescue practitioners (BRPs) to cancel certain routes at the end of February.
‘Government is not in agreement with the BRPs about the decision to cancel certain flights,’ he said. ‘We as government are saying we need to sit down with the BRPs and discuss the matter.’
The Ministry of Public Enterprises says that the government is concerned that ‘recent decisions concerning SAA have caused market and customer uncertainty that may jeopardise the long-term future of the airline’.
‘Government will be making representations to the BRPs in order to balance the necessity for trimming unprofitable routes with the need to ensure the future sustainability of both the airline and SA’s aviation industry. This will necessitate a review of the BRPs’ recent announcement,’ according to the statement.
‘Our submission will include a proposal that the route network changes announced by the BRPs be reviewed to ensure the sustainability of the airline. Whilst understanding the impact of the business rescue process on the restructuring of routes, staffing and costs, the government and BRPs are both committed to a viable SAA as an outcome of this process.’