[Opinion] Privatisation necessary to save SAA

Tawanda Makombo | 14 Oct, 2020
Operations and jobs will remain at risk if state-owned South African Airways (SAA) is not privatised.

Since 1994, the government has availed over R57 billion in bailout funds to SAA, including R16.5 billion over the past decade. In September 2020, the government agreed to a further R10.4 billion bailout, notwithstanding the fact that the airline has not made any profit for close to a decade, and has been struggling with inefficient planes, unprofitable routes and a bloated workforce.

In the face of government efforts to resuscitate SAA failings, the only logical solution is to privatise the entity. Privatising SAA will enhance competition in the aviation market, lessen the bureaucracy that restricts SAA from adjusting to volatile market conditions and improve corporate governance in general.

CRA analyst, Tawanda Makombo notes: “Continuing to bail out SAA is not viable. The government is wasting taxpayer’s funds that could have been allocated to better deserving sectors of the economy. SAA needs to be privatised as a matter of urgency,” says Makombo. “Privatisation would help to reduce government spending, improve transparency and accountability and most importantly, save thousands of jobs that are at risk.” 

Article by Tawanda Makombo 

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