Cash-strapped SAA in R307m sport sponsorship

2010-02-03 14:56

DESPITE its financial difficulties, South African Airways (SAA) is

forking out R307 million in sport-related sponsorships over four years,

according to the Public Enterprises Minister Barbara Hogan.

Replying to a parliamentary question by the Democratic Alliance’s

Donald Lee, Hogan said SAA was sponsoring Argentine golfer Angel Cabrera for

three years up to August 31.

SAA was also providing sponsorship for the Sunshine Golf Tour, ATP

Tennis, Cricket SA, SA Rugby, SA Football Association, and ISM Golf


The total value of SAA’s sponsorships amounted to R268.3 million in

cash and R38.7 million in free travel, which was spread over four years from

2008 until 2012.

“The individual value per sponsorship is commercially sensitive

information and confidential, and thus cannot be disclosed. Disclosure could be

prejudicial to both SAA and the organisation being sponsored,” Hogan said.

Today, Lee said that the R307 million sponsorships for sporting

celebrities since 2008 meant that one-fifth of the amount designated to SAA in

bailout funds last year – R1.6 billion – had been spent on sporting sponsorships

and free travel.

The mere fact that SAA had spent such a significant amount on

sporting sponsorships, while simultaneously requiring bailout funds, was

difficult to comprehend.

“While the DA acknowledges the need to remain competitive in the

global airlines industry, and that sponsorships can aid this, the sheer value of

the sponsorships seems astonishing, and it seems highly doubtful that SAA is

getting any bang for their buck.

“Faced with a choice of spending R307 million on freebies and

sponsorships, and financial stability, we (the DA) would prefer the latter from

a state-owned enterprise,” Lee said.

The bailouts for SAA over the past five years had come either as

cash injections or loans guaranteed by the state.

The history of these bailouts showed that every year the state was

paying a fortune to keep SAA afloat – 2004/05 R6.1 billion, 2005/06 R2.4 billion

(conversion of loans to equity), 2006/07 R1.3 billion (loan guarantees), 2007/08

R5.4 billion and 2008/09 R1.6 billion.

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