The Department of Public Enterprises is considering the possibility of introducing a strategic equity partner for South African Airways (SAA), says the Parliamentary Communication Services.
Officials from the department told the Standing and Select Committees on Appropriations that despite previous bail-outs for SAA, including the R5 billion under consideration, the airline will still be insolvent.
The department needs to find other ways of improving SAA’s balance sheet.
SAA said it estimates that the airline will be profitable by 2021 and will incur financial loses of R5.2 billion and R1.9 billion for the 2018/19 and 2019/20 financial years, respectively.
The joint meeting of the Standing and Select Committees on Appropriations also questioned the allocation of R1.249 billion to the South African Express airline, as stipulated in the 2018 Adjustments Appropriation Bill.
The meeting asked National Treasury whether this allocation is a loan or a buy-in of shares, how the amount will be paid and whether an assessment was made before these allocations were done.
On Wednesday, the committees received briefings from National Treasury on the Adjustments Appropriations Bill and the Special Appropriation Bill of R5 billion, which is part of the SAA bailout intervention.
“Since Treasury officials were not ready to address these questions, the meeting instructed officials to provide the committees with a comprehensive brief on Friday,” the Parliamentary Communication Services said. – SAnews.gov.za