#Budget2016 / Johannesburg - The South African Transport and Allied Workers Union (Satawu) has demanded a meeting with SAA and the Treasury to discuss the planned merging of the national airline with SA Express.
Credit: BLOOMBERG
Troubled national carrier SAA will have to merge with SA Express and find a minority equity partner, according to the finance minister's budget speech. File picture: Waldo Swiegers, BloombergThe union said it was worried that the merger, which was announced by Finance Minister Pravin Gordhan during his Budget speech on Wednesday, could result in job losses at SAA.
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Satawu spokeswoman Zanele Sabela said the union wanted to understand what the merger would mean for its members. Sabela said on principle the union was opposed to privatisation.
“We don’t know what it means to potentially engage with a minority partner. Are they paving the way for privatisation? We would not want to entrust a national carrier to the private sector. The chief executive and numerous boards have been under scrutiny, nobody has looked at senior management who have been under boards, they are responsible for bleeding cash at SAA,” Sabela said.
The planned merger was part of the government’s bid to rein in state-owned entities, end bailouts and to shut down any non-performing state-owned entities.
Gordhan said during the speech that he had agreed with Public Enterprise Minister Lynne Brown to explore “the possible merger of SAA and SA Express, under a strengthened board, with a view to engaging with a potential minority equity partner, and to create a bigger and more operationally efficient airline”.
Thorn
Embattled and loss-making SAA, which has been a thorn to the national purse strings, requested a R5 billion guarantee to help it complete its audited financial statements. And in a damning investigation, global forensic firm Ernst & Young found that potentially 60 percent of the total procurement made by SAA could be subject to weak business controls last year.
Ebrahim Khalil Hassen, a public policy analyst and editor of zapreneur.com, said SAA was in a desperate need of a turnaround strategy.
“It makes sense to combine government investment,” said Hassen.
“In terms of getting a minority stakeholder – although I am opposed to privatisation – I believe airlines are part of the private sector, unlike water. I think it is a good decision. Over time SAA will become profitable. There are some tough decisions to be made,” Hassen said.
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