SAA received R50.7 billion in bailouts – but remained bankrupt
South African Airways (SAA) received R50.7 billion in direct government funding from 2007 to 2022, of which R48.4 billion was received in the past ten years.
This was revealed in a presentation on state-owned company bailouts and government guarantees to the Standing Committee on Public Accounts.
The National Treasury’s Asset and Liability division delivered the presentation, which is charged with efficiently managing public sector debt.
In its presentation, National Treasury revealed that the total direct recapitalisation amount for SAA from 2007 until the airline was placed into business rescue in December 2019 was R22.8 billion.
However, even more was spent on the struggling state-owned airline since the business rescue process was announced.
An additional R16.4 billion was allocated over the 2020 Medium Term Expenditure Framework (MTEF) period to repay government-guaranteed debt.
R10.5 billion was also made available to SAA in 2020/21 to implement the business rescue plan following the 2020 Medium Term Budget Policy Statement (MTBPS).
The Minister of Finance has announced an additional allocation of R1 billion in the February 2023 budget speech for SAA to settle outstanding business rescue process obligations.
Therefore, when the 2023 Appropriation Bill assents into law, SAA will have received R50.7 billion in direct government funding from 2007 to 2022.
Despite the billions in bailouts, the SAA did not succeed in becoming a sustainable airline and simply wasted taxpayers’ money.
To save the airline, the Department of Public Enterprises reached a deal with the Takatso Consortium to acquire 51% of SAA.
The Competition Commission has recently granted conditional approval for Takatso Aviation to buy a 51% shareholding in South African Airways.
With this conditional approval, the transaction has now been referred to the Competition Tribunal for its consideration and final adjudication.
If the Tribunal approves the merger, the remaining 49% shareholding in SAA will be retained by the DPE as the shareholder representative of the government.