Privatise SAA - no more bail-outs

2015-05-13 06:00

TO date South African Airways has received bail-outs from the government, obviously at the expense of taxpayers, to the amount of R14 billion.

SAA continuously incurs loss, which does not make economic sense to keep.

Comair is challenging SAA in court citing unfair advantage in respect of continuous bail-outs and state guarantees by government which other carriers are not amenable to. Comair is economically viable and it is reliant on a business model, which is profitable.

However, if SAA continues to incur loss, Comair, just like Velvet Sky Airlines, will have no option but to liquidate. In spite of incessant loss, only SAA is allowed to be in operation.

Government may be hesitant to privatise SAA because of the status that’s attached to a country owning its own aeroplanes. However, it can be stated that ownership with perpetual loss cannot be allowed at the behest of poverty in this country.

However, with government, anything is possible. If the courts rule in favour of Comair, the verdict will have far- reaching implications for SAA. Ultimately the business playing field has to be fair and equal with no airline having an unfair advantage, like SAA.

We now await the judgment.

Vijay Surujpal


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