DA asks banks to consider bailing out troubled SAA
Companies / 28 January 2019, 3:15pm / ANA Reporter
File picture: Siphiwe Sibeko/Reuters
JOHANNESBURG - The Democratic Alliance (DA) said on Monday that it has written to the chief executives of commercial banks to request them to consider making it possible for South African Airways (SAA) to get funding.
This follows reports that SAA chief executive, Vuyani Jarana, on the sidelines of the India/SA Business Summit in New Delhi at the weekend said that commercial banks have in principle approved R3.5 billion of the funding SAA requires to keep operating until the end of March.
Jarana also reportedly said he saw "no reason why" the government and the banks would not continue to back the airline as it has been delivering on the targets it has set.
Alf Lees, DA spokesperson on finance, said he has written to chief executives of FNB, Standard Bank, Nedbank, Absa and Investec to request that they consider the decision of making it possible for SAA to survive long enough until the taxpayer is forced to bailout the national carrier in the 2019 budget.
Lees said without the connivance of lenders such as banks over the past five years, SAA would not have been able to continue trading and taxpayers would have been saved R15 billion in bailouts already paid to SAA with another minimum of R16.7 billion still to come over the next two years.
"Whilst the R15 billion in bailouts to SAA is hard earned taxpayer money, what should not be discounted are the opportunity costs of services that could have been supplied, or economy boosting infrastructure that could have been built," Lees said.
"It has been over a year since Jarana took over as CEO of SAA. During this time he has fiddled on the fringes but has not been able to slash the massive costs, such as bloated and un-competitive employee costs, that result in the ongoing losses."
Lees said the DA remains of the view that the only way to possibly save SAA would be to put it into business rescue.
- African News Agency (ANA)
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